Educational Finance in Thailand - UNESCO Bangkok

– Volume II/3 – 

Educational Finance in Thailand: 

A Review and Recommendations for Improving Allocative Efficiency 

Prepared for UNESCO-Bangkok 

as part of the 

Asian Development Bank Social Sector Program Loan 

in the framework of the Education Management and Finance Study 

Project TA2996-THA 

Written by 

Anthony M. Cresswell 

State University of New York, Albany, USA 

July, 1999

Acknowledgements 

This report was written by Dr. Anthony M. Cresswell. He headed a team of national 

consultants from the UNESCO Principal Regional Office for Asia and the Pacific 

(PROAP), which carried out the educational finance review between July 1998 and 

March 1999 in the framework of the ADB-funded Education Management and Financing 

Study (TA. 2996-THA). The review benefited from substantive and administrative 

support provided by the Office of the National Education Commission (ONEC). The 

following individuals were involved in this study: 

Consultant team 

Dr. Anthony M. Cresswell, UNESCO international consultant 

Associate Professor, University at Albany-State University of New York, USA 

Dr. Sirilaksana Khoman, UNESCO national consultant 

Associate Professor and Dean, faculty of Economics, Thammasat University, Bangkok 

Dr. Snong Lhitwisas, UNESCO national consultant 

Head, Information Technology Center, Non-Formal Education Department, Ministry of 

Education 

ONEC Officials and Researchers 

Dr. Nongram Setapanich, Deputy Secretary General, ONEC 

Ms Supaporn Kohengkul, Education Officer, ONEC 

Ms Prapapan Vongsarochana, Education Officer, ONEC 

Ms Pannee Peerapornratana, Education Officer, ONEC Oregon, USA 

Mr. Panthep Larpkesorn, Education Officer, ONEC 

Ms. Ratchada Jayagupta, Education Officer ONEC 

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Table of Contents 

A. Executive Summary..................................................................................1 

1. Purposes of the Review...............................................................................1 

2. Financial Crisis ...........................................................................................1 

3. Implications of the Financial Crisis for Educational Finance ....................1 

4. Educational Reform Initiatives ...................................................................2 

5. Education in the National Budget: Structure, Process, and 

Allocations ..................................................................................................3 

6. Government Expenditure Issues .................................................................5 

7. Private Educational Expenditure ................................................................7 

8. Issues of Equity...........................................................................................8 

9. Information Systems for Financial Management and Policy .....................9 

10. Recommendations.....................................................................................11 

11. Comparison of Basic Components of Current System and 

Recommendations.....................................................................................24 

B. Purposes and Context of Educational Finance Review.......................25 

1. Background .............................................................................................25 

1.1 Purposes of the Review..................................................................25 

1.2 Financial Crisis ..............................................................................25 

1.3 Implications of the Financial Crisis for Educational Finance .......29 

1.4 Educational Reform Initiatives ......................................................34 

2. Review of Educational Finance in Thailand.........................................40 

2.1 National Budget: Structure, Process, and Allocations...................40 

2.2 Government Expenditure Issues ....................................................50 

2.3 Private Educational Expenditure ...................................................61 

2.4 Issues of Equity..............................................................................70 

2.5 Student Count Allocation Mechanisms: Implications for 

Equity and Efficiency ....................................................................78 

2.6 Information Systems for Financial Management and Policy ........82 

3. Recommendations...................................................................................86 

3.1 An approach to Education Finance Reforms.................................86 

3.2 Financing Basic Educational Programs.........................................87 

3.3 Higher Education Financing ........................................................104 

3.4 Implementation Issues .................................................................106 

3.5 Information Systems and Resources............................................108 

References .........................................................................................................111 

Appendixes........................................................................................................114 

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Table of Appendixes 

Appendix 1 

Examination of the capacity of the Information System...........114 

Appendix 2 Projections of costs of expanding basic education to 12 years .151 

Appendix 3 Description of school survey .....................................................154 

Appendix 4 Demand-Side analysis and the financing of education .............158 

Appendix 5 

Impacts of crisis on private schools...........................................184 

Appendix 6 Bangkok Metropolitan Administration Voucher Policy ...........185 

Appendix 7 Finance allocation methods .......................................................187 

Appendix 8 

Program structure of the education budget................................189 

Appendix 9 Private sector resource mobilizing ............................................190 

Appendix 10 Household expenditure by region and type of expenditure, 

National Social Survey ..............................................................192 

Appendix 11 Results of regression analysis of household expenditure on 

education, National Social Survey ............................................193 

Appendix 12 Provincial wealth rankings and quartiles...................................194 

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Table of Tables 

Table 1 Adjustments to Education Budget, 1998 .......................................31 

Table 2 

SPPL Policy Matrix Conditionalities.............................................33 

Table 3 National Budget by Sector, FY 1997.............................................40 

Table 4 Education Expenditure by Level, 1998 .........................................54 

Table 5 Per Pupil Recurrent Expenditure by Level ....................................55 

Table 6 

Ratio of Higher to Secondary Education Expenditures 

Per Pupil, OECD Countries, 1997 .................................................55 

Table 7 Education Expenditure and Family Income by Level ...................56 

Table 8 Budget Allocation by Level and Expenditure Type, 1998 

(million Bahts) ...............................................................................58 

Table 9 

Table 10 

Table 11 

Expenditure Per Head by Level and School Type.........................59 

Estimates of Household Expenditure on Education 

(ONEC Survey, 1997)....................................................................63 

Average Private Expenditure on Higher Education by Type 

of Institution (ONEC Survey)........................................................65 

Table 12 Overall Support from Private Sources by Type of School ............69 

Table 13 

Table 14 

School Head’s Estimates of Possible Increase in 

Private Support ..............................................................................70 

Data for Provinces with Disparate Primary Financing..................73 

Table 15 Correlation of Province Resources with Wealth ...........................74 

Table 16 Agencies and Jurisdiction for Operation of Schools ...................108 

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Table of Figures 

Figure 1 Example of Finance Flows ............................................................17 

Figure 2 

Figure 3 

Changes in Currency Values, Selected Asian Countries 

(as of 8 July, 1998) ........................................................................26 

Changes in Stock Index Values, Selected Asian Countries 

(as of 8 July, 1998) ........................................................................27 

Figure 4 Actual and Planned Private School Enrollment, 1997-1998 .........28 

Figure 5 

Figure 6 

Average Amount Owed by Private School Students, 

1997 and 1998................................................................................28 

Number of Private School Students Owing Money, 

1997 and 1998................................................................................29 

Figure 7 Components of the National Budget by Sector, 1987-1997..........41 

Figure 8 Typical National Budget Cycle .....................................................44 

Figure 9 Education as a Per Cent of the National Budget, 1978-1997 ........51 

Figure 10 

Trends in Thai Education Budget as % of GDP............................52 

Figure 11 Education Expenditure a % of GDP, International Comparisons .53 

Figure 12 

Figure 13 

Figure 14 

Figure 15 

Figure 16 

Figure 17 

Per Cent of Budget by Education Level and 

Category of Expenditure, 1998......................................................57 

Tuition and Indirect Expenditure on Schooling by Type of 

School (1997 Survey) ....................................................................64 

Private Higher Education Expenditure by Type of Institution......66 

Expenses as a Per Cent of Family Income by Income Groups, 

Public vs. Private Schools..............................................................67 

Expenses as Per Cent of Income by Occupation of Parent, 

Public vs. Private Schools..............................................................67 

Per Cent of Families with Sufficient Income to Support 

Higher Education ...........................................................................68 

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Figure 18 

Figure 19 

Figure 20 

Figure 21 

Primary Budget Allocation Relative to Enrollment by 

Province (1997)..............................................................................73 

Average Primary and Higher Education Expenditure 

Per Capita by Province Wealth Quartiles ......................................75 

Primary Expenditure and Student teacher Ratios by 

Province Wealth Quartiles.............................................................76 

Students per Teacher and Wealth by Region.................................77 

Figure 22 Secondary School Transition Rates by Region .............................78 

Figure 23 Example of Finance Flows ............................................................98 

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LIST OF ABBREVIATIONS 

ADB 

BOB 

BMA 

BOT 

CSC 

DGE 

DNFE 

EMIS 

FY 

HRD 

KTB 

LEA 

MOE 

MOF 

MOI 

MOLSW 

MOPH 

MUA 

NEC 

NESDB 

NGO 

NTC 

ONEC 

ONESQA 

ONPEC 

OPEC 

ORIC 

OTCSC 

PC 

RI 

RIT 

SLB 

SLS 

SLSC 

SSP 

SSPL 

TA 

TDC 

TERO 

TRF 

TVE 

UNESCO 

VAT 

Asian Development Bank 

Bureau of the Budget 

Bangkok Metropolitan Administration 

Bank of Thailand 

Civil Service Commission 

Department of General Education 

Department of Non-formal Education 

Education Management Information System 

Fiscal Year 

Human Resource Development 

Krung Thai Bank 

Local Education Authority 

Ministry of Education 

Ministry of Finance 

Ministry of Interior 

Ministry of Labor and Social Welfare 

Ministry of Public Health 

Ministry of University Affairs 

National Education Commission 

National Economic and Social Development Board 

Non-governmental Organization 

National Teacher Council 

Office of the National Education Commission 

Office for National Educational Standards and Quality Assessment 

Office of the National Primary Education Commission 

Office of the Private Education Commission 

Office of the Rajabhat Institute Council 

Office of the Teacher Civil Service Commission 

Position Classification 

Rajabhat Institute 

Rajamangala Institute of Technology of the MOE 

Student Loans Bureau 

Student Loans Scheme 

Student Loans Scheme Committee 

Social Sector Program 

Social Sector Program Loan 

Technical Assistance 

Teacher Development Center 

Teacher Education Reform Office 

Thailand Research Fund 

Technical and Vocational Education 

United Nations Educational, Scientific and Cultural Organization 

Value Added Tax 

viii

Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA 

Education Management and Finance Study July 1999 

A. Executive Summary 

1. Purposes of the review 

The Educational Finance Review presented here was conducted as part of the Asian 

Development Bank Social Sector Program Loan. This program was initiated to assist the 

Royal Thai Government in responding to the financial crisis affecting Thailand. The 

purpose of the Finance Review is to aid in that process by providing an analysis of the 

current educational finance situation in Thailand and making recommendations 

concerning improvements and reforms. The review addresses these objectives in detail 

and includes policy recommendations concerning the issues identified. 

2. Financial crisis 

The full range of effects of the economic crisis on the students and schools is difficult to 

document, but apparently serious. The best information about the economic condition of 

schools and students concerns the private school system (collected by the Office of the 

Private School Commission, OPEC). The enrollments in the private schools appear to be 

dropping, which would be expected due to their higher costs. The number of students 

owing tuition to the schools has also risen appreciable in the recent crisis period. The 

average amounts owed by upper secondary school students is quite large, in spite of their 

small numbers, due to the higher tuition and fees involved at that level of the education 

system. Although comparable figures are not available for the public schools, there is 

every reason to believe that the nature of the financial impact is at least as severe in that 

sector. However, the enrollments in public schools have not fallen overall during the 

crisis period. 

3. Implications of the financial crisis for educational finance 

3.1. Budget adjustments 

a. As a result of the crisis, there was a reduction in the original education budget 

allocation for the 1998 fiscal year. The initial 1998 basic education budget 

allocation was 98,104.73 million Baht. This was reduced approximately 7.8 % 

(7,624.16 million Baht) to 90,480.59 million Baht. While a substantial reduction, 

this must be viewed in the context of the overall pattern of budgets for education. 

The reduction results in a drop in the proportion of basic education budget to 

GDP, down to 1.78% from 2.0% in 1997. Even after the reduction, however the 

basic education budget remains a higher proportion of the national budget (11.3%) 

compared to the previous year (9.95%) (without reduction the basic education 

budget is 12.26% of the total budget). This pattern indicates a continuing high 

commitment of Government funds to basic education. 

b. These reductions were not evenly distributed across budget categories. The 

reductions in some areas (such as Personnel Development and Standards) are very 

large, with virtually zero reductions in other areas. This uneven distribution of 

reductions was described as a way to protect core program areas and direct 

services to children at the expense of indirect or more discretionary areas. This is 

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not an effective strategy for longer-term savings, since the costs of “catching up” 

with deferred maintenance and development of staff and programs can rise 

exponentially with longer delays. But as a strategy it does indicate both a 

commitment to protecting basic services and an optimistic expectation of a 

relatively short time for economic recovery. This may minimize the possibility of 

serious immediate damage to basic programs and direct services to students. But it 

misses an opportunity to re-examine the finance arrangements and create reforms 

responsive both to immediate needs and problems of longer standing. 

3.2. Social sector program loan (and ADB conditionalities) 

The goals for the social sector program loan (SSPL) combine a concern for 

alleviating the more immediate effects of the financial crisis as well as addressing 

some of the more fundamental reform goals for the educational system. All of the 

conditionalities in the SSPL have some budget implications, but they vary 

considerably in their relevance to this review. Five of the items involve delegation 

of financial decision-making authority to the local school or campus, and thus will 

change the budget process in fundamental ways. This is a shared concern of this 

review and the decentralization component, and so will be discussed in both 

reports. 

4. Educational reform initiatives 

4.1 Major educational reform initiatives are underway in Thailand, not all of 

which are directly results of the financial crisis. As this review began, the 

Government was drafting a new Education Bill, with important changes in 

financial, administrative, and pedagogical policies, all of which have 

significant implications for this review. 1 . The reform initiatives relevant to 

this analysis are: 

a. Free Basic Education - the extension of free basic education to include the 

upper secondary level (grades 10-12). 

b. Elimination of entrance examinations - control of entrance to the public schools 

through examinations may no longer be permissible. 

c. Student Count Driven Allocation System - this distribution system would 

provide subsidies based on attendance or enrollment and open up possibilities for 

attendance at both Government and private schools with Government support. 

d. Decentralization - provisions for increasing budget or administrative autonomy 

in schools and higher education institutions. 

e. Teacher Reform – Proposals for local hiring and remuneration, and improved 

equity in allocation of teachers as key educational resources. 

f. Efficiency and Equity Initiatives - Initiatives to improve monitoring, 

performance based management systems, and overall budget autonomy. 

1 The provisions of the Education Bill discussed here are taken from the most recent draft available at the 

time of this initial drafting (Oct. 12, 1998). However, the Bill was not in final form and was under review 

when this report was prepared. Therefore there may be major differences between the provisions in the 

current version of the Bill and the material presented here. Appropriate revisions will be made as more 

recent translations of the Education Bill become available. 

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g. The Role of the Private Sector – Provisions to enhance the mobilization of 

greater local and private support for education. 

5. Education in the national budget: structure, process, and allocations 

Education comprises the largest share of the national budget by a substantial margin (22% 

in FY 1997), exceeding the social service sector by almost 60 billion Baht. Trends in the 

size of the education share have been continuously upward. The rate of growth in the 

education sector has averaged over 17% per year over the past decade, a rate exceeded by 

the economic development and the public health sectors at about 23%. The reductions in 

the 1998 budget brought a halt to the rapid growth rates. But the past period of large 

investment in education does provide a base of development that can be sustained through 

a period of cut backs through increases in efficiency and better financial management. 

5.1 Structure of the education budget 

a. The budget information is linked to the goals of the government, for education 

or any other area, through two kinds of budget structure: programs and functions. 

To provide more detailed information, each sector is divided into sub-sectors and 

specific programs. The education program structure includes seven sub-sectors, 

and a total of 27 separate programs (see Appendix 8). There is no systematic 

relationship, however, between the sub-sectors or program categories and the 

organization of Government agencies. To complicate the matter even further, the 

Government has also adopted an alternative category structure to reflect the 

various goals of activities, the categories used by the United Nations. 

b. Thus to examine how actual operations and expenditure of funds map onto 

programs and goals, it is necessary to establish linkages across many layers of 

information and organizational boundaries. The existing government accounting 

structure provides the conceptual basis and raw information for potentially 

answering most of the analysis and management questions referred to above. 

However, there do not appear to be adequate organizational capacity or 

arrangements at the national level to employ this information as effectively as 

possible. As a result there is a plethora of inconsistent formats and budget reports, 

and considerable difficulty in obtaining financial or other management-related 

information in a form useful for many kinds of management or policy analyses. 

5.2. The education budget process 

a. Because the education system is rather highly vertically centralized at present, 

much of the decision making takes place at the national level. But there does exist 

important financial decision making discretion at the provincial levels, and at local 

schools and higher education institutions. The participants in the budget cycle at 

the national level are the ministries and agencies, the main finance policy 

organizations: Bureau of the Budget, Bank of Thailand (BoT), National 

Economic and Social Development Board (NESDB), and the cabinet. As a result 

of the financial crisis, there have been modifications in the budget making process 

for education (and other ministries). 

3



b. The current process departs from past patterns in important ways, and the 

Bureau of the Budget is introducing procedures to make the decision-making 

process more collaborative with the ministries. At the beginning of the cycle the 

Bureau of the Budget (BOB) receives the basic framework (targets and ceilings) 

and any special expenditure controls for the new budget from the Prime Minister 

and other top government officials. The BOB then works with a ministry to 

calculate what is referred to as a "fixed cost budget," which represents the base of 

contractual obligations and other commitments over which there is little 

discretionary control. It also includes what are considered basic operations, and 

the funds sufficient to maintain these operations. 

c. The BOB will introduces any new policy constraints and targets at earlier stage 

in the process. Once the fixed cost budget is set, the parties can negotiate new 

programs and adjustment to be added/removed. This interactive process works 

from the "fixed cost" base through requests for additional funds and programs, up 

to the eventual budget proposal. BOB is also attempting to initiate a program of 

working more closely with ministries to hold hearings to set budget ceilings in a 

more open process. 

5.2.1 Strengths of the budget process 

a. The budget processes appear to be functional and successful in many important 

respects, and suffer from flaws and weaknesses in others. The main aspects of 

functionality and success are: 

a.1. That the process is well understood and reasonably transparent. 

a.2. It is timely and effective in producing the necessary decisions when required. 

a.3. It helps establish a basis for sound administration by providing stable and 

predictable resource flows. 

a.4. It provides a basis for participation in and review of decisions. 

a.5. It provides a basis to control the flows and expenditure purposes for 

coordination with government policies and programs. 

b. At each level and agency of the system, administrators and staff were well 

aware of the mechanics of the budget process, could produce and explain budget 

documents and decisions, and were knowledgeable about budget administration, 

reporting, and controls. 

5.2.2. Problems in the budget process 

A number of important problems with the budget process were identified as well: 

a. Central Control - Budget decision making is viewed as too strongly influenced 

by the Budget Bureau and the resulting budget as too rigid and restrictive. 

b. Excessive Budget Rigidity - The budget imposes too many restrictions on 

management at lower levels: the so-called “line item” problem. Shifts of resources 

can require BOB approval. Such rigidity causes inefficiencies. 

c. Incremental Decision-Making – The large amounts of budget detail limit the 

opportunity for comprehensive analysis and review is limited, resulting in a 

largely incremental approach. 

4



d. Teacher Allocation – This allocation is influenced by the salary budget for new 

teachers, but also strongly influenced by other decisions at provincial and lower 

levels. Official guidelines cannot always be met due to insufficient numbers of 

teachers in particular subjects or transfers following initial assignments. 

6 Government Expenditure Issues 

6.1 Financial allocation across levels of education 

a. The results of the review show large differences between the per cent of the 

budget allocated to each level and their enrollments. Pre-primary and primary 

education represent almost two-thirds of the enrollments, but receive less than half 

of the allocated budget. Similarly, general academic secondary education’s share 

of the budget is less than half the size of its share of the overall enrollment. By 

contrast, the university level receives a proportion of the budget almost double its 

share of enrollment. The unit cost for baccalaureate level education for example is 

almost six times that for secondary education. Unit expenditure estimates for 

primary education are over 10 % higher than for secondary education, a reversal 

of the typical pattern. By comparison, secondary education costs per pupil in 

Malaysia run about 1.6 times those for primary. These ratios are quite different 

from what is found in developed countries where the ratio of unit expenditure on 

higher to secondary education is usually no more than 3:1. 

b. The primary beneficiaries of the high levels of subsidy to higher education 

appear to be the higher income students and households. University students in 

general come disproportionately from the higher socioeconomic levels of society. 

This generalization does appear to apply to Thailand. Substantially higher family 

incomes characterize the students in baccalaureate study compared to the other 

levels of education. Overall, the indication is clear that the high levels of support 

for higher education cannot be justified on equity grounds, except perhaps for 

those students attending one of the open universities. 

6.2. Expenditure across budget categories 

a. The review of allocations by budget categories shows some imbalances. There 

are larger proportions of salary expense for the lower levels, which must be 

accounted for by higher proportion of staff. The overall student-teacher ratios for 

the secondary public schools represents an over 50 % higher staffing ratio for the 

lower level, which easily accounts for the budget differences. By contrast, the 

proportion of salary expense for higher education appears to be lower than would 

be expected in comparison to other higher education systems. This could be a 

result of a preponderance of lower-ranking faculty. For example, MUA figures 

show 50 % of staff at the rank of lecturer and less than 2 % at the rank of 

professor. 

b. The proportion of capital expenditure in the higher education level is also above 

what might be expected. Some of the increase may be caused by the enrollment 

increases from 491,956 in 1991 to over 1.1 million in 1997. By comparison, 

5



however, a similar, though somewhat slower expansion was occurring in 

Malaysia, with the increase from 1991 to 1996 from approximately 600,000 to 

1,000,000 university students. Yet the capital expenditure for Malaysian higher 

education in 1995 was less than 10 % of the total. Thus the capital costs for higher 

education do appear to be unusually high. 

c. The high subsidy levels for higher education were justified by participants of a 

Policy Workshop on Educational Finance Reform Proposals (5-6 March 1999, 

The Rose Garden) as necessary investments to accomplish the recent expansion of 

participation in higher education. 

6.3. Public vs. private schools 

a. Financial resources for the private schools for recurrent expenditure are below 

those for the public schools in the basic education levels. The total expenditure 

levels for the public and private basic education levels are roughly comparable, 

with the largest difference between the primary levels, with the public level being 

approximately 26 % above the private, and the Upper secondary private about 6 % 

below the public. However, the total expenditure levels do not give a complete 

picture. The recurrent expenditure levels in the public schools are considerably 

above the private schools, with the reverse being true in the capital expense 

category. The capital expense levels are roughly equal to the recurrent expense in 

the private schools, an unusually high proportion for basic education. This is most 

likely a consequence of lower salary levels in the private schools, greater expense 

for development and expansion, and possibly higher levels of expenditure on 

equipment and other capital goods. 

b. The differences between public and private sectors are much more pronounced 

in higher education. Expenditures per head in the closed (highly selective) 

universities is more than six times that in the private universities. In contrast with 

basic education, the level of capital expenditure in the private higher education 

sector is considerably lower than in the public. Only the Ramkhamhaeng Open 

University has lower expenditure levels for either recurrent or capital categories. 

Given the large enrollment, largely part-time nature of the Ramkhamhaeng Open 

University, this expenditure level is not surprising. What these data show clearly 

is a three-level higher education system: the closed universities at the top, with 

three to six times the resources levels of the rest of the sector, other public 

institutions in the middle, still well above the private, and the private university 

system is the low finance level, roughly on a par with private upper secondary 

expenditure levels. 

c. Higher education systems in most countries show wide differences in 

expenditures per head, so these differences in themselves are not necessarily a 

policy problem. However the relationship between the sources of the finances and 

the beneficiaries raises a question of equity. Higher education in general serves 

families with considerably higher income than the population as a whole. The 

higher education system is apparently less open to lower income students, in part 

no doubt because they received lower quality basic education and do not qualify 

for admission, and in part because they cannot afford to attend. To the extent that 

6



this is true, the higher education system is less of a mechanism to promote access 

to education and educational opportunity, and more a mechanism to reinforce the 

existing patterns of wealth and status in the society. This latter outcome would be 

quite inconsistent with overall policy goals and principles of equity. 

7. Private educational expenditure 2 

a. The high level of private expenditure on education has important implication for the 

pursuit of the Government’s equity goals. The private costs of education occupy a much 

larger proportion of household income for the poor households than for the richer ones, as 

would be expected. For the three highest income groups the expenditure for basic 

education is approximately 10 % or less of total family income, even for private 

schooling. For the lowest income groups the proportion rises to as much as 70 % for the 

total expense of private schooling. As would be expected, the burden of expenses for 

private education exceeds that for public by substantial proportions, even at the low 

percentages for the high-income groups. Even the expenses for the highly subsidized 

public schools impose a substantial burden on the lowest income group, where the cost of 

public schooling exceeds 20 % of total income. A similar pattern of disproportionate 

expenditure burden is found when the impact is examined by the family’s main 

occupation. 

b. The income-related burden is similar for higher education. Slightly over 70 % of the 

highest income families surveyed reported that their income was sufficient to support 

higher education for their children. For the lowest income group, the comparable number 

was less than 5 %. Only in the highest income group did more than half of the families 

indicate that they thought they had sufficient income for these purposes. 

7.1 School level revenues 

a. The schools report receiving significant amounts of direct support from the socalled 

private sector. These range from an annual average of approximately 200 

Baht per pupil in ONPEC schools to over 4,000 Baht per pupil in proprietary 

schools. The amounts include tuition, private donations and contributions in kind. 

The wealth of the province in which the schools were located does not have any 

apparent relationship with the level of private support reported by the schools. 

b. The prospects for increasing this support are weak according to school 

principals. Only 89 principals out of 625 responding indicated any possibility of 

increasing revenues, and only 77 estimated 10 % or more. However, some schools 

are extremely successful in mobilizing resources from the private sector. To 

increase the likelihood of private support the Government should provide training, 

incentives, and support for school administrators to mobilize new private 

revenues. This should not supplant government support to those schools were 

private funding cannot be increased. 

2 The estimates of household outlays are based on two sources of data: a survey of approximately 5,000 

households conducted by the ONEC in 1997, and the results of the 1996 National Social Survey, employing 

a sample of approximately 25,000 households. The estimates of school revenues from private sources are 

based on a sample survey of over 600 schools conducted as part of this project (described in Appendix 3). 

7



8. Issues of equity 

8.1 Financial equity 

a. Overall, there do not appear to be gross or systematic inequities in the 

allocation of educational resources to basic education across provinces or regions. 

With the exception of the specific instances discussed in the following section, the 

existing financial policies appear to be adequate in providing roughly equal 

budget and teacher resources across provinces and regions. There are notable 

instances, however, where budget and teacher allocations are lower to regions or 

provinces with lower income or wealth levels. And overall, the finance system 

does not appear to be effective in equalizing or compensating for these provincial 

or regional disparities. 

b. An examination of allocation of both financial and teacher resources to primary 

education shows a pattern of wealth neutrality. This consistency with respect to 

wealth differences has both positive and negative implications. It is positive in 

that the existing policies and investments do not apparently aggravate existing 

wealth or other disparities. However, the wealth disparities among the provinces 

are substantial. To treat them all equally with respect to the government’s 

educational allocations does little to compensate for the disadvantages of poverty 

and relative isolation. 

c. Other resource allocation patterns are more wealth neutral by comparison. 

These include the allocation of teachers among regions. There is some variation in 

the primary level student/teacher ratios, particularly between the northern and 

southern regions, with approximately 20:1 and slightly over 25:1 respectively. 

While significant in terms of financial implications, differences of this magnitude 

in class sizes are not likely to be important in educational terms. It is clear from 

that teacher allocation patterns are neither equalizing nor disequalizing relative to 

regional wealth. 

d. Equality of educational opportunity can also be reflected in the performance of 

the students or schools. The differences observed between primary-lower and 

lower-upper level transition rates are substantial, suggesting important disparities 

in educational opportunity. The range of almost 20 % between the lowest 

(Northeastern) and highest (Southern) rates is too large to be attributed to chance. 

Since the other three regions are roughly equal, the disparity between the high and 

low cases appears to represent some marked difference between the educational 

and socioeconomic conditions of these two regions. The difference cannot be 

attributed to variations in the resources allocated to the educational system, as the 

foregoing analysis shows. While not the cause of such disparities, financial 

policies should be crafted to help ameliorate them. 

8



8.2. Student count allocation mechanisms and parent choice: implications for 

equity and efficiency 

The current reforms increase the possibility for parent choice of schools, and 

remove some financial barriers to choosing. This has implications for the 

proposed Student-Count Allocation mechanism. Therefore the review included an 

examination of the possible impacts of increased choices for parents, linked to 

“free” or subsidized attendance and the chosen school. This was explored through 

a sample of focus groups of parents formed for this project. The study was 

conducted based on a small sample of parent focus groups. The group discussions 

were recorded and summarized by the research team. (A detailed analysis of the 

parent’s comments is found in the Appendix). 

8.2.1. The parental choice focus groups 

The results of this focus group study reveal considerable complexity in parent’s 

views of school choice. The results also show that the impacts of a free choice 

scheme on the actual attendance patterns and parental choices will be very hard to 

predict. First, it was clear from the comments that parents have high expectations 

for their students and their schools. The comments reveal parents with a very high 

value for education, and a strong willingness to support education financially, and 

find the best schools for their children. As a result, the parents take into account 

more than expenses when choosing a school. The most frequently mentioned 

concerns were the reputation of the school, quality of teaching and school 

facilities, safety, closeness to home, attitudes and behavior of teachers, good 

discipline, and number and quality of activities and equipment. Of course the cost 

of sending children to school was mentioned frequently as well, but the cost 

factors mentioned extend beyond tuition and fees to clothing, transportation, food, 

and other incidentals. But it seems clear in the comments that financial 

considerations are only one, and not necessarily the major factor in this decision 

process. Because this is a multi-factor problem, introducing the free choice as 

away of alleviating the financial considerations does not by itself seem to produce 

massive changes in choices. Overall, only 38 of the 105 parents who responded 

(36.2%) said they would choose another school if it were free.. In the districts 

with high choice (many alternative schools) the proportion of parents who would 

change increased to 41%, a significant shift, but still well below half. And almost 

half of those who chose different schools (10/23) came from one primary school. 

9. Information systems for financial management and policy 

Financing an efficient and effective education system requires high quality information 

resources for management and policy decision making. Therefore this review of the 

finance system includes attention to the information systems and resources involved in 

providing finances for education. 

9



9.1. Strengths of the current system 

a. The overall picture of information resources for educational finance is positive 

one in many important respects. The volume and timeliness of financial 

information are both generally adequate. Considerable progress has been made in 

automating this collection process and using electronic reporting procedures and 

network connections to improve data flows. The development of these basic 

information resources appears to be accompanied by fairly large numbers of 

competent staff. As long as these human resources are developed and maintained, 

they will provide a sound base for continued improvement in the overall 

information environment. 

b. Only some areas of the education system are demonstrating a capacity to put 

these information resources to use in policy and management-related analysis. 

Evidence of the capacity to perform these tasks is found in publications of the 

Office of the National Education Commission (ONEC). The Ministry of 

Education has a functioning Education Management Information Systems Center 

that houses most education data and generates regular reports. This Center 

recently developed the information base to participate in an OECD pilot project 

for contributing data to the OECD Indicators publications, providing more 

valuable analyses for tracking and comparing educational systems and 

developments. In addition, the Department of Non-Formal Education has 

extensive data base and analysis capacity. Furthermore, the Ministry of Education 

has recently developed the information base to participate in an OECD pilot 

project for contributing data to the OECD Indicators publications, providing more 

valuable analyses for tracking and comparing educational systems and 

developments. These products illustrate the conceptual and management capacity 

in place to make good use of available information resources. 

9.2. Problems in the information environment 

a. The capacity to select, integrate, analyze, and interpret effectively is not well 

developed in the information environment for educational finance. For policy 

makers and managers to build this capacity to a desirable level, it will be 

necessary to overcome some substantial problems in the organizational and 

technical environment in which finance information is produced and used. This 

section describes these problems as a background for recommendations for 

development strategies. The principal problem interfering with full and effective 

use of finance information is what is usually called a “stovepipe” approach to 

information resources. The term refers to the long pipe often used to vent smoke 

from a stove, passing up through the ceiling. Each stove has its own pipe. Smoke 

doesn’t mix across pipes, and the only view in a stovepipe is straight up or straight 

down. This image accurately describes the movement of information, financial 

and otherwise, in the levels of educational system. The separation and lack of 

integration of information resources adds more to the volume than to the 

analytical utility of available information. 

10



b. The lack of coordinated statistics is accompanied by the lack of assessment 

information. There is no readily available, authoritative, timely, consistent source 

of performance information about school performance and quality. The lack of 

this kind of information limits the ability of students and parents to make 

informed choices of schools and limits the management and policy development 

functions of school administration. 

10. Recommendations 

10.1. An approach to education finance reforms 

a. To achieve the objectives set out in the Constitution, new Education Bill, the 

SSPL, and education plans, some major changes are needed in the ways schools 

are financed. The recommendations are based on the premises that basic education 

will consist of the first 12 years of schooling, beginning from Grade 1, and that 

this education will be provided free of tuition and fees in government or private 

schools. These premises are consistent with the provisions of the Constitution and 

current drafts of the new Education Bill. The discussion is also based on the 

premise that basic education will take place in an administrative structure that is 

considerably more decentralized than at present. Since the finance system is an 

integral part of any administrative system, any new approaches must be consistent 

with this movement toward greater decentralization. 

b. The finance system must also be appropriate to the wide variety of 

circumstances of schools and students in basic education. In addition, the system 

should support the Royal Thai Government’s policy calling for greater parent 

involvement in education as well as encouraging increased support for education 

from households and other private sources. This requires a system with the 

flexibility to deal effectively with widely different schools, students, and local 

circumstance. These recommendations are designed to meet these requirements, 

as well as to provide a strategy that is adapted to the problems of implementing 

significant reforms in government. 

10.2. Finance system reform elements 

10.2.1. Revised program structure 

a. Consistent with this systemic approach to finance reforms, it is recommended 

that the Royal Thai Government budget for the support of education should 

consist of five new program areas, reflecting a major shift in the Government’s 

approach to the financing of education. The program areas are: 

a.1. Basic Educational Support - consist of financial (as opposed to in-kind) 

support. In this way, the planned decentralized control of the institutions will 

include responsibility for converting the allocated financial resources into the 

staff, material, and other goods and services necessary to operate educational 

programs. 

11



a.2. Educational Equalization Support - allocates financial resources to enhance 

the educational opportunities for disadvantaged students and institutions. 

a.3. Educational Quality Assurance - ensures that high quality performance of the 

educational system at all levels is developed and enhanced. There will be a mix of 

central and provincial operations to assess and support both the management and 

instructional performance of educational institutions. 

a.4. Educational Research and Quality Improvement – conducts and supports 

research and assessment activities. Allocates funds for competitive innovation 

projects 

a.5. Educational Infrastructure Development – capital investment from central 

funds and subsidies for equalization of local capacity for disadvantaged areas. 

b. Each program serves a distinctive purpose and consequently has a different 

finance mechanism. 

c. The budget for the Research and Quality Improvement program could be built 

from the existing Quality Improvement program and additional funds for the 

development of the research base for a national-level assessment and quality 

assurance capacity. Some consolidation of these activities into a single responsible 

agency (perhaps as part of the ONEC), would be desirable. The National 

Educational Standards and Quality Assessment Office, described in the new 

Education Bill, could be the location for such activities. Such an office could be 

the source of grants to schools and other organizations to support the development 

of the necessary tools and techniques. The funds should be allocated on a 

competitive basis for projects and research activities that have high potential to 

improve the overall quality of the educational system. 

d. The fifth role is a recasting of the capital investment portions of the educational 

budget. The responsibility for infrastructure development and maintenance should 

be shared by the national and lower levels of the system. The national level 

responsibility should extend to a mix of major infrastructure projects with national 

importance (such as networking infrastructure for schools), and support for local 

and provincial investment. 

10.2.2. Plan for increase in overall education expenditure 

The overall level of financial allocation from the government and private sources 

appears to be roughly in line with other countries in the region. But there is still a 

gap between Thailand’s level of investment in education and that of more 

developed countries. Longer term planning should include goals of increasing the 

allocations to education to at least 5 % of GDP, which would be achieved by 

maintaining the recent upward trend. 

10.2.3. Review capital expenditure needs 

The balance among types of expenditure for the current and recent past budgets 

seems tipped in favor of heavier investment on the capital side. It is not clear 

whether this is a result of specific policies to enhance infrastructure, or just the 

accumulated effect of uncoordinated decisions. The new finance policies, 

12



especially expanding opportunities for secondary education may require continued 

high capital expenditure in the short run to build the necessary facilities. The 

Government should conduct a detailed facility capacity study to examine this 

possibility. 

10.2.4. Reduce subsidies to higher education and central administration 

Expenditures on central administration also appear to be larger than necessary, 

and will probably drop as a result of downsizing and consolidation of central 

Ministries. The level of expenditure on higher education subsidies cannot be 

justified on either efficiency or equity grounds and should be reduced. Increased 

investments in pre-primary and primary education quality and access are likely to 

produce greater returns in terms of overall quality and efficiency. Distribution of 

financial and teacher resources appears to treat most provinces and regions 

equally, but does little to compensate for economic disadvantages. The allocation 

of financial resources to higher education is an exception to this general pattern, 

since higher education resource allocations tend to be disequalizing, going 

disproportionately to wealthier provinces. 

10.2.5. Local funding of staff through block grants 

a. The block grant approach, if fully implemented, should cover all the school 

financial resources, including staff salaries. Since these salaries and the staff that 

go with the salaries are such a large and important component of the operation, 

they should be subject to managerial control and decision making at the 

operational (institutional) level. That is, the funding of staff salaries, as well as the 

financing of other resources, should in effect follow the children. 

b. To implement the block grant approach to staffing and salaries in a short period 

of time could be very disruptive to morale, overall staffing patterns, and abruptly 

place a large additional administrative load on the local administrators. The move 

to the full block grant approach should therefore be planned over a longer time 

frame and proceed in stages over a five or more year period. 

c. The description of the finance scheme also raises a number of possible issues of 

personnel and salary policy. For some of these issues, it is assumed that the 

existing personnel policies with respect to benefits, pensions, and matters of 

routine personnel administration will remain unchanged. The main changes will 

be in the locus of the hiring and retention decision, and the establishment of salary 

levels. The issues of salary levels and hiring are discussed in Section 2.1.4.6, 

below. 

10.2.6. Appropriate expenditure and cost sharing levels 

a. This block grant or student count-driven approach to educational finance 

requires a way of setting per-student amounts or guidelines. In the current policymaking 

setting for educational finance in Thailand, this is commonly referred to 

as the “unit cost” issue. In these recommendations, however, it is referred to 

instead as the issue of per-student amounts or guidelines. This is done to 

13



emphasize the distinction between a policy decision on per-student amounts that 

is based on a mix of analytical and political factors versus a true “unit cost,” based 

on the full range of factor costs of educational programs. 

b. In the finance system recommended here, per-student amounts will determine 

the overall amounts of education expenditures, and will strongly influence both 

quality and equity in the system. Thus these per-student amounts are central 

educational policies and should be the focus of policy debate. Therefore a perstudent 

amount determination involves a mix of technical and political issues. The 

political issues are matters of national goals and education priorities, not of 

financial analysis, and so are taken up in this review. The technical issues include 

how to estimate appropriate guidelines for these per-student amounts, and how to 

employ the guidelines in allocation decision making. 

c. This method is based on the assumption that finance allocation policy should 

reflect concern for both quality and efficiency. Therefore, the per-student amounts 

should be based on some estimate of the cost of an efficient, high quality program. 

These estimates should be based on a sample of high performing schools at each 

level and in each region or province. A detailed survey of inputs and input costs 

and performance should then be done in each school by a team of researchers 

visiting each school. These data can then be used to calculate per-student input 

costs for all the schools in the sample. Since all the schools are high performing, 

the lower per-student input costs would reflect greater efficiencies. These 

efficiencies could then be statistically adjusted for the effects of non-financial 

inputs that could effect efficiencies, such as student previous achievement, 

socioeconomic status, and teacher qualifications. The adjusted per-student 

expenditures would more closely reflect operational efficiencies and could then be 

used as guidelines for per-student amounts in allocation policies. 

10.2.7. Improved student accounting and reporting 

The current methods of accounting for students in schools and classrooms must be 

revised to provide more accurate and reliable data. The official number of students 

in each school is currently taken to be the reported enrollment in the annual June 

data collection time period. The current enrollment data does not accurately reflect 

the actual numbers of students in classrooms on a day-to-day basis. It is this latter 

number that represents the school level demand for resources which should be the 

basis for allocation decisions. The method recommended here is the use of actual 

attendance counts, on a weekly or monthly basis. It would also be necessary for 

periodic auditing of attendance reports to ensure accuracy, which could become 

part of routine financial auditing processes. 

10.2.8. Allocation modeling and decision making 

Using formulas and per-student calculations in educational finance policy making 

requires ways to estimate the consequences. This requires complex calculations, 

based on models or simulations of the finance system, enrollments, and school 

distributions. The use of such tools requires an up-to-date data base with the 

necessary inputs to the calculations, as well as the appropriate calculation tools. 

14



Establishing the analytical and staff capacity for testing the consequences of 

formula alternatives is not a major problem. However, the lack of adequate data is 

a serious impediment to this approach. Attention to this matter is discussed in the 

section on overall information systems problems and recommendations. 

10.2.9. Appropriate sharing levels 

The recommendation for this system is an 80/20 % central vs. Local sharing ratio. 

The 80 % proportion in this recommendation is chosen arbitrarily as the point 

from which to conduct the policy debate. The matter of what sharing proportion is 

appropriate for the central government is a major policy issue. The number chosen 

will affect the overall size of the education budget, as well as the operation of the 

equalization support. So the proposal for this particular sharing level is intended to 

be a reasonable starting point for that debate, not a final recommendation based on 

some scientific analysis. The way in which the 80 % share operates in the overall 

finance scheme is discussed in more detail in the next section. 

10.3. Basic government subsidy mechanism 

a. For the initial design of the finance system, the operation of the schools is 

assumed to be decentralized to the provincial, and local education levels 3 . That is, 

the operational and local financial responsibility for basic education would be 

devolved to the province, district, and municipality. In some sparsely settled rural 

areas, school administrative and financial operations may have to be located in 

some combination of sub-districts or other units, depending on local conditions. 

When local financial responsibility and decision making are mentioned, it refers to 

either the municipality or school as the main administrative unit, referred to as the 

local education authority (LEA). This finance scheme presumes the existence of 

such an authority, with some local revenue raising power. The province would be 

charged with developing a plan for how sub-province units would be formed and 

operated, following guidelines from the Ministry of Education. 

b. The issue of how to treat the Bangkok Municipal Authority in this scheme is 

not taken up here. BMA could remain as an autonomous unit for the operation of 

its own schools, absorbing the existing government schools within its borders, or 

be subdivided into smaller operating units for a higher degree of decentralization. 

10.3.1. Allocation mechanism 

a. Based on this administrative structure, there would be three normal government 

revenue streams into the schools. The first would be the basic subsidy from the 

central government, in the form of block subsidies based on the student count of 

effective enrollment. If the central government continues to collect the largest 

proportion of total tax revenues, as through the VAT, etc., then its educational 

subsidy responsibility should be correspondingly large. The central subsidy is 

3 The current legal definition of local education authorities does not specify the unit or level involved. This 

issue will be settled in part by further legislation. However a mechanism for designed lower level units is 

included in these recommendations. 

15



designated as uniform for all students in order to simplify the budget calculations 

at the central level, but does not provide for a fully equitable distribution of 

resources, however, due to the large differences in provincial and local abilities to 

support their share of educational finances. That consideration is addressed 

through the equalizing mechanism described below (Figure 1). 

b. With respect to enrollment, the policy and procedures for counting effective 

enrollment would be structured to encourage the schools to maintain high 

attendance rates. For example, effective enrollment could be defined as attendance 

in a certain minimum percentage (such as 90%) of the school days, or on average 

daily attendance, or some similar data. Specific policies and regulations would be 

needed to establish the procedures and controls for reporting attendance and 

ensuring accurate data. 

c. The equalizing portion of the finance mechanism would operate through 

adjusting the local share of total educational expenditure to reflect local ability to 

pay. If the local education authority (LEA) decides to increase the local budget, it 

will receive a subsidy from the province, based on a share (%) of the amount that 

the local per capita budget exceeds the central subsidy. The actual sharing 

percentage will be based on the wealth of the LEA and proportion of 

disadvantaged students. In this way, poorer LEA’s and ones with concentrations 

of poor students will receive a larger revenue share than richer LEA’s for the same 

financial effort. The funds available for the provincial subsidy will come from the 

equalizing grant from the central government, based inversely on provincial 

wealth, and on provincial tax revenues. 

d. The central government would have to set the policy for the standard subsidy 

level, the expenditure level judged necessary to provide an adequate education 

(subject to adjustment each budget cycle). Then, using the formula for each LEA's 

equalizing grant, the province would calculate the amount necessary to "top-up" 

each of its LEA's to the standard "adequate" level. The central government would 

then provide a fixed proportion of this equalizing subsidy to the province (say 

80%), and the remainder would be derived from provincial resources. The 

central/provincial sharing ratio could also be adjusted to reflect the relative wealth 

of the province. 

e. The figure below (Figure 1) illustrates an example, based on a standard for an 

adequate education is set at 100,000 Baht per student per year. 4 The basic central 

subsidy is 50,000 Baht per student with an additional average of 30,000 Baht per 

student allocated as equalization subsidies. Consider two LEA's, one poor, one 

rich, which decide that they need only the 100,000 Baht per student for an 

adequate education. If the poor LEA's cost sharing percentage is low, the LEA 

would only have to raise, say, 5,000 Baht to receive another 45,000 from the 

provincial equalizing fund. For the rich LEA, the sharing proportion might be 

higher so that the rich LEA would have to raise 45,000 Baht in local revenue, to 

receive a 5,000 Baht subsidy and raise the total to 100,000. Thus all LEA's have 

4 The amounts used in this example are for illustration only and are not a recommendation about actual 


16



an incentive to raise local revenue to support education, but the equalizing portion 

of the finance system allows poorer schools to provide quality education although 

local resources are small. 

Figure 1 - Example of finance flows 

Poor LEA 

5,000 

Local tax revenue 

35,000 

Rich LEA 

45,000 

Equalizing Grant 

15,000 

50,000 50,000 

Central Subsidy 

f. The third revenue stream would be for special projects, quality improvement, 

and capital construction. The basic funding for these projects could be distributed 

through block grants from the central to the provincial level, using the same 

formula calculation as for the equalizing grants for basic education. Provincial tax 

revenues can supplement the grants for quality improvement and related special 

projects as well. 

10.3.2. Measure of need for local educational authorities 

The targeting mechanism now in use for the student loan scheme may be part of a 

workable approach to developing such a local need measure. Eligibility for the 

student loan depends in part on family income, requiring students to report this 

income as part of their application. For students in secondary schools, the teachers 

and other school staff who are usually familiar with the student's families school 

staff can review this eligibility information. 5 A similar approach could be applied 

at the primary level as well. A system for provincial-level verification of such 

poverty levels would be necessary. A more comprehensive indicator of local 

financial capacity is also needed. The value of real property could be included in a 

local financial capacity measure, if there is confidence in the accuracy and 

comparability of assessment practices. Some attention would be necessary to 

adjusting assessed values for variations in local assessment practices. Methods for 

doing so are common in countries in which real property taxes are a significant 

portion of local government finances. 6 

5 These loan scheme procedures are described in detail in the report on that program (see Vol.II/4). 

6 For example, in some jurisdictions assessed values are compared to a sample of actual market transactions 

in which property changes hands. The ratio of assessed value to market value in this sample is then used to 

adjust the overall assessed values for the local area. 

17



10.3.3. Capital expenditure 

A preferable alternative for capital construction costs would be to change the legal 

structures to allow provincial or certain forms of local governments (e.g., 

municipalities) to incur their own debt. With the authority to borrow directly from 

private capital markets, these LEA’s and governments could finance their own 

long-term capital projects, with the debt service payments included as part of the 

recurrent budget. These features would impose a more rational framework on 

capital investments decisions. In addition, the full financial responsibility for 

capital construction projects would lie with the government units closer to the 

assets and their use, and thus in better position to make investment decisions and 

to manage asset use and proper maintenance. Another advantage of financing 

capital construction through borrowing in private capital markets is to insulate 

long-term capital investment decisions and construction projects from the effects 

of short-term budget problems. Cutting sharply on construction spending can 

exacerbate recessionary trends or result in added costs of suspending construction 

as well. 

10.3.4. Finance allocations for private schools 

a. The finance provisions for the private schools should encourage maintaining 

organizational diversity, mobilizing private resources, and options for 

experimentation and innovation. To meet these objectives, the private educational 

sector should be relatively free of the framework of rules and regulations that 

apply to the government schools, but at the same time be held to high standards of 

integrity and performance. Consequently, a separate finance scheme is required. 

b. Equal per-student subsidies should be provided to all recognized private 

schools, at a lower level than for the government schools, coupled with incomeindexed 

scholarships to maintain equity and access to private education for 

students from low income families. To qualify for the subsidy, or to enroll 

scholarship students, the school would have to be registered by the OPEC. This 

would be the primary government quality control mechanism. The size of the 

subsidy would be set at 35 % of the per-student subsidy amount for the 

government schools, with an amount equal to an additional 35 % of the perstudent 

government subsidy as a fund for scholarships to students from lowincome 

families. Those schools enrolling higher proportions of poor students 

would receive higher support, improving the educational opportunities for those 

children. The private schools would continue to depend on private resources to 

finance the full program, thus maintaining incentives for mobilizing these 

resources for education. 

10.4. Related reform issues 

10.4.1. The issue of mobilizing private resources 

In current discussions of finance system reforms, considerable rhetoric has been 

addressed to the topic of mobilizing increased flows of private resources into 

education. In fact all government resources come, in the first instance, from the 

18



private sector. Therefore the implications of a proposal to mobilize more financial 

resources from the private sector really hinge on whether the mechanism of 

mobilization is compulsory, as in a tax increase, or voluntary. To be effective 

voluntary mechanisms require some incentive for the private individual or 

organization to contribute resources to education. Government policy is not likely 

to have much impact on the non-financial incentives, so is not analyzed here. The 

tax-based incentives in the current new policy proposals (Education Bill) do not 

represent a savings to the government since they are tax credits, i.e., each Baht of 

contribution represents a Baht of revenue loss. These incentives simply shift the 

control over where the government resources are allocated from the government 

itself to the individual contributor. This can be an effective incentive, since it 

allows a person or organization to allocate government resources in a way to 

produce personal benefits. It is also a disequalizing mechanism, since richer 

persons have more discretionary funds to take advantage of this incentive, and 

may be taxed at higher rates than the poor. Relying on private resources also 

introduces potentially high levels of uncertainty into the financing of essential 

government services and may not a be a sound foundation for provision of 

education. 

10.4.2. Supply-side vs. demand-side finance of education 

a. There has been much discussion of what has come to be called "demand-side" 

as opposed to "supply-side" financing of education. The apparent issue involved 

in this discussion is whether the flow of resources to education should be 

determined by or controlled by the "supply-side" (i.e., the suppliers of education, 

schools and their administrative structures), or the "demand-side," (i.e., those 

demanding educational services, parents and students). In this discussion, the 

current state of education in Thailand is characterized as dominated by the 

"supply-side," i.e., the government providers of schooling. Any reforms 

undertaken should increase the responsiveness of the schools to the "demand 

side," i.e., the consumer. This would presumably improve quality as well. It is also 

implied, though not necessarily stated, that the amount and types of schooling 

supplied should more closely match demand. It is also argued that the demands of 

the consumers will lead to more effective or more rapid reforms as well. 

b. These demand side initiatives in other countries have taken the same form as 

many of the reform initiatives in progress in Thailand: targeted subsidies, 

vouchers, student loans, community grants, and other forms of public assistance to 

private schools. Demand side financing has also used stipends directly to students 

and some forms of community-level financing. There is some evidence that these 

mechanisms can have the desired effects, but the pattern of success is not strong 

or consistent (Patrinos and Ariasingam, 1997). Therefore there is some basis to 

pursue the demand-side financing initiatives proposed for Thailand, but they 

should be initiated gradually with careful evaluation of their effectiveness. 

c. A much more detailed discussion of the nature and potential for demand-side 

financing is found in the paper by Dr. Sirilaksana Khoman in the Appendix 1. 

19



10.4.3. School performance and financial allocations 

The allocation mechanisms for providing resources for education programs should 

be separate from the administrative and management mechanisms for ensuring 

efficient and effective performance of school staff. It is, of course both feasible 

and appropriate to create financial incentives for teachers and administrators to 

improve their performance, or to provide sanctions for the same teachers and 

administrators for ineffective or improper performance. But the incentives or 

sanctions must be targeted at individual teachers or administrators, not at the 

levels of support for the programs themselves. It is therefore inappropriate and 

ultimately unworkable to link budgets for programs to the performance of the 

students in those programs in such a way that punishes students for ineffective 

teaching or administration. Reducing the budget for any schools with low 

performance indicators, as some current proposals recommend, should not be part 

of the finance system at all. Instead, incentives and/or sanctions for inadequately 

performing school staff should be part of the educational management structure. 

10.5. Higher education financing 

10.5.1. Level of subsidy 

a. The overall subsidy of higher education should be reduced. The current subsidy 

ratio of over 90 % of the direct costs of higher education cannot be defended on 

either efficiency or equity grounds. Estimates from OECD countries are available, 

for both centralized and decentralized systems. For the mostly decentralized 

OECD countries 7 , the public expenditure on higher education is approximately 

two-thirds of the total. For the same countries, as well as the mostly centralized 

countries 8 , the ratio of expenditure on higher education relative to lower education 

is less approximately 2:1. This latter proportion reflects much higher participation 

rates of upper secondary education in the OECD countries than in Thailand. So a 

somewhat higher ratio may be a more reasonable short-range goal. Overall, 

however, these levels of support and subsidy seem like reasonable longer-term 

policy goals for Thailand. 

b. Achieving such policy goals would mean very substantial shifts in the overall 

funding of higher education. It is quite likely that the costs to students and 

families for higher education could increase by a factor of five or more. Such 

higher fees would effectively bar poor students from higher education and place a 

much greater burden on middle income families. Therefore a substantial 

expansion of income-based financial aid should be made available to students. 

This is could be based on an expansion and further development of the student 

loan scheme discussed in a separate report. Scholarships for able poor students 

7 These countries are Australia, Canada, Germany, Japan, Switzerland, U.K. and U.S. (OECD Indicators, 

1997). 

8 These countries are Austria, Belgium, France, Ireland, Italy, Luxembourg, Netherlands, and Portugal. 

(OECD Indicators, 1997). 

20



should also be developed. In addition, it would be necessary to phase-in over a 5- 

10 year period the shift of costs under this recommendation. 

10.5.2. Cost recovery and private contributions 

The arrangements for the financing of higher education should be shifted to 

depend on greater private contributions to the cost of the programs, and 

mechanisms for cost recovery wherever feasible. Subsidy rates in the range of 

one-third to two thirds of the programmatic costs of higher education would be in 

line with the policies in many developed and some developing countries. For the 

non-programmatic costs (room, board, incidentals), subsidy rates should be much 

lower or eliminated. This would require large increases in tuition rates and other 

sources of revenue to replace the reduced government subsidies. The existing loan 

and scholarship programs are functional and could be increased to maintain 

educational opportunity for lower income students. 

10.5.3. Administration of financial autonomy 

If the individual campuses are to make best use of the financial autonomy to be 

granted, they will need a financial information system to support decision making. 

Such systems should be based on the same sort of uniform accounting structure 

and generally accepted accounting practices as are developed for the local 

education authorities, but adapted to the needs of the various sized and types of 

higher education institutions in Thailand. This both a technical and in greater part 

a human resource and organization problem, requiring new organizational 

structures and human resources to engage in effective financial management in the 

new environment. These training and organizational concerns should be part of 

the overall implementation plans for financial reforms. 

10.6. Implementation Issues 

10.6.1. Transparency and allocation policy deliberations 

The system described here uses formulas and standard amounts as the basis for 

allocation policy. Therefore the policy dialog on educational resource allocation 

can focus on these formulas and standards as the main content of policy. The basis 

for decisions is open to review and encourages the participation of relevant 

stakeholders in the deliberative processes and can solidify support for policies so 

derived. 

10.6.2. Alternative finance system structure: charter school service areas 

New policy should be formulated to provide a mechanism through which local 

governments could create alternative finance and administrative mechanisms that 

better fit local conditions. That mechanism would require new legislation allowing 

for the creation of a new kind of government unit for providing basic education: a 

charter school service area. The charter, developed locally, would describe the 

means for finance and governance of the area, including taxation and decision 

making processes. If ratified by the provincial and central government, the charter 

21



would provide the authority for the school to raise tax revenues, construct new 

facilities, and operate its own schools. This could encourage local initiative, 

creativity, and adaptation to local needs and circumstances. 

10.6.3. Province as fiscal agent 

The proper administration of block grants and local school budgets will require 

changes in the financial management arrangements at the provincial and local 

levels. Therefore a two-part approach is recommended: a program of training and 

management support for local school administrators and making the provincial 

education office (or in large districts the district education office) the fiscal agent 

of the local education authority (LEA). The block grant would be actually fixed 

amount of spending authority for each LEA. The funds would reside in an account 

at the provincial level, to be spent according to the LEA budget, and disbursed by 

the province as agent. Through such a system, a relatively modest investment in 

accounting systems and management staff at the provincial (or district) level 

would support full budget discretion for LEA's, while maintaining good 

accounting and financial management practices. This degree of centralized 

transaction processing would also improve the financial information resources 

generally. 

10.7. Information systems and resources 

10.7.1. Horizontal centralization and information policy 

a. As a result of the education systems divided operational structure, the 

information on budgets, staff, and enrollments is organized around the specific 

administrative processes and control needs of the separate agencies. It is therefore 

not routinely or directly possible to assemble data about specific levels or cross 

agency components of education. As a result, there is a misalignment between the 

policy level of decision and analysis, which is concerned with broad program 

areas, and the administrative level, which is concerned with control, accounting, 

and assessment only within it’s area of operation. There is also misalignment 

between the information flows and the policy goals of the system. Information 

flows and structures reflect maintenance and support of institutional structures and 

processes, not broad policy goals or concerns of system performance or 

efficiency. To examine the impacts of the education system or of policy decisions 

vis a vis goals or the client environment, it is much more problematic. The goal of 

information system reform should be to get the information structures and flows 

better designed to serve larger policy goals and management issues. 

b. It would appear that the ONEC is in the position and has the potential resources 

to take on the role of information resource management and coordination. But the 

policy structure and operational authority for the ONEC (or any other agency) to 

engage in coordination and management of information resources do not exist. 

Therefore the Government should formulate an educational information policy, 

which provides the basis for common approaches to definitions, standards, and 

management of information resources. The policy should include specification of 

authority in one agency for the coordination and planning functions. The same 

22



agency should have primary responsibility for educational statistics structures, 

standards, reporting, and analysis. The second initiative is for the Government to 

develop and institutionalize its capacity to generate educational indicators 

routinely; develop Executive Information Systems for managers and policy 

makers, and develop the capacity for data mining, and more extensive electronic 

networking for the collection and dissemination of educational data. 

10.7.2. Development and Implementation Strategies 

The success of the reforms recommended here will depend in large part on the 

efforts and abilities of educators and other officials at the provincial, district, and 

LEA levels. They will be called upon to work in new ways, solve new problems, 

and apply new skills and techniques. They will need training and support to 

succeed. Our field visits revealed a number of school principals with high levels 

of skill and well-developed systems for budget management and decision making. 

A training strategy should build in these strengths, and include identification of 

those areas and issues in need of greatest investment. Administrator organizations 

should be involved in these activities to make best use of their expertise. A second 

strategy would include gradual introduction of the new budget processes and 

administrative procedures in pilot projects for testing and adjustment. Experience 

in these pilot projects would provide useful experience in identifying the training 

and support needs of administrators at each level. 

10.7.3. Decentralization and budget control – the need for flexibility and 

quality control 

The main reasons for line item budget control--quality assurance and avoidance of 

corruption, can be achieved by other, less intrusive means and still provide the 

needed local flexibility. The mechanisms are in place already for effective 

reporting of school budgets and auditing of school expenditures. Review of these 

information sources by local and higher-level government officials can assure that 

resources are being properly used. School officials can be more responsible for 

budget decisions as long as the mechanisms for accountability are in place as well. 

The existing mechanisms for reporting and auditing of schools budgets should be 

improved and made subject to assessment and monitoring by the Central 

Government. 

23



11. Comparison of basic components of current system and 

recommendations 

Finance system component Current system Proposed system 

Basic Subsidy Allocation 

Mechanism 

Incremental budget based on 

previous allocation for line 

items and per-student formulas 

Standard per-student block 

grant subsidy for all schools 

Equalizing Mechanism for 

Disadvantaged and Handicapped 

Capital Financing 

Education Budget Decision 

Making Process 

Budget Control 

Teacher Allocation and Salary 

Determination 

Higher Education Financing 

Local Government 

Responsibility 

for categories of expenditure 

None; some special schools 

and programs for handicapped 

students; loans indexed to 

poverty 

Allocation to specific projects 

from Government current 

revenues 

Largely centralized, based on 

requests from lower levels and 

negotiation among Ministries, 

Departments, and Budget 

Bureau 

Largely centralized and 

restrictive; based on line-item, 

function-object type budget 

structure; adjustments require 

central approval; audit and 

reporting to central 

government required 

Initial salary and allocation by 

central government; uniform 

salary schedule for 

government schools; teacher 

transfer controlled by local 

and central decisions 

Large subsidy to public 

institutions, with low cost to 

students; High per student 

costs in selective institutions; 

low subsidy to private 

institutions; minimal cost 

recovery in public institutions 

Minimal except for 

municipalities; municipalities 

provide substantial portion of 

total budget 

Additional per-student block 

grant subsidy based on measure 

of need and/or disadvantage; 

loans and scholarships indexed 

to need 

Authority for borrowing from 

private capital markets to local 

school authorities and higher 

education institutions 

Budget determined largely by 

decisions on allocation 

formulas and parameters; 

policy decision on allocation 

mechanisms 

Decentralized to local level; 

Authority for allocation within 

overall budget rests with local 

school authority; auditing and 

reporting to Central 

government required 

Allocation and salary 

determination by open labor 

market and negotiation; phase 

in local control of salaries over 

5-10 year cycle 

Reduced subsidy and increased 

tuition and cost recovery in 

public institutions; phase in 

increased tuition and fee 

structure over five year period 

Increase taxation authority and 

responsibility for education 

financing; local tax effort 

incentive equalized for local 

ability to raise revenue by 

equalization formula 

24



B. Purposes and context of the educational finance review 

1. Background 

1.1 Purposes of the review 

a. The Educational Finance Review presented here was conducted as part of the 

Asian Development Bank Social Sector Program Loan. This program was initiated to 

assist the Royal Thai Government in responding to the financial crisis affecting 

Thailand. The purpose of the Finance Review is to aid in that process by providing an 

analysis of the current educational finance situation in Thailand and making 

recommendations concerning improvements and reforms. 

b. These more general objectives are specified in more detail in the description of the 

issues and expected products of the technical assistance activities under which the 

Finance Review was conducted. These objectives are to: 

b.1. undertake a comprehensive review of expenditure on education including: (a) 

consolidated general government expenditure; (b) private expenditure; and (c) 

private sector outlay on the private school system. 

b.2. analyze and evaluate the allocation of expenditure in major areas including; 

(a) the breakdown between investment and recurrent spending; (b) the functional 

allocation of expenditure across different levels of education; (c) the allocation of 

recurrent expenditure among different categories of expenses such as salary and 

scholarships, training and instructional material; and (d) the distribution of budget 

across provinces. 

b.3. based on the review, provide policy recommendations on issues including the 

following: (a) the adequacy of the overall share; (b) appropriateness of the 

allocation of resources between different levels and types of education; (c) 

composition of non-capital expenditure; (d) geographical distribution of resources; 

and (e) budget keeping and reporting-related issues. 9 

c. The review addresses these objectives in detail and includes policy 

recommendations concerning the issues identified. 

1.2. Financial crisis 

a. The financial crisis has been a severe blow to what was a strong pattern of 

economic growth for Thailand. By affecting the value of the Baht, asset values, 

and the flow of capital, the crisis has impacted all areas of society. The severity of 

the crisis is reflected in a number of common indicators of economic growth and 

stability, in particular the value of the currency, the value of publicly traded 

securities, and the pace of economic growth (increase in GDP). The early 1990’s 

saw very rapid annual economic growth rates, with GDP increases in the 8-9 per 

9 

Educational Expenditure Review Terms of Reference. 

25



cent range. The rate dropped to an annual increase of 5.5 per cent for the GDP in 

1996, virtually zero (- 0.4%) in 1997, and a negative growth rate of 8.5 per cent 

for 1998. The crisis is reflected in the rapid drop in asset and currency values in 

late 1997 and early 1998, as shown in Figure 2 and Figure 3 below. 

Figure 2 - Changes in currency values 

Changes in Currency Values, Selected Asian 

Countries (as of 8 July '98) 

40% 

20% 

0% 

-20% 

-40% 

-60% 

-80% 

-100% 

Thailand 

Malaysia 

Phillipines 

Indonesia 

Singapore 

Korea 

Honk Kong 

Taiwan 

Japan 

Since June '97 

Since Dec. '97 

b. These indicators from Figure 2 and Figure 3 show that the relative magnitude 

of the initial crisis in Thailand was very serious, exceeded by a significant margin 

only in Indonesia. However, the more recent trends suggest that the recovery in 

Thailand may be somewhat more rapid than in nearby countries. The proportional 

rebound in both currency and asset values for Thailand was greater than for any 

Asian country except Korea, and appears to be maintaining that pattern. However 

the effects on the population and on the educational system cannot be expect to 

dissipate rapidly. Therefore the need for appropriate reform measures remains 

strong. 

26



Figure 3 - Changes in stock index values 

Changes in Stock Indexes, Selected Asian Countries 

(as of 8 Jul '98) 

20% 

10% 

0% 

-10% 

-20% 

-30% 

-40% 

Since June '97 

Since Dec. '97 

-50% 

-60% 

Thailand 

Malaysia 

Phillipines 

Indonesia 

Singapore 

Korea 

Honk Kong 

Taiwan 

Japan 

c. The effects of the economic crisis on the students and schools is more difficult 

to document, but apparently serious. The best information about the economic 

condition of schools and students concerns the private school system (collected by 

the Office of the Private School Commission, OPEC). The evidence of the 

impacts can be shown in a number of ways. The enrollments in the private schools 

appear to be dropping, which would be expected due to their higher costs. The 

enrollment changes are shown in Figure 4 below. 

27



Figure 4 - Actual and planned private school enrollment 1997-98 

Actual and Planned Private School Enrollments 

1997-98 

700,000 

Number of Students 

600,000 

500,000 

400,000 

300,000 

200,000 

100,000 

0 

Pre-Primary Primary Lower Secondary Upper Secondary 

'97 Actual '98 Plan '98 Actual 

d. The number of students owing tuition to the schools has also risen appreciably 

in the recent crisis period. The average amount owed by students is shown in 

Figure 5 below, and the number of students owing money to the schools is shown 

in. Figure 6. 

Figure 5 - Average amount owed by private school students, 1997 and 1998 

Average Amount Owed by Private School Students, 1997 & 1998 

Average Owed (Baht) 

4,500 

4,000 

3,500 

3,000 

2,500 

2,000 

1,500 

1,000 

500 

0 

1997 1998 


28



Figure 6 - Number of private school students owing money, 1997 and 1998 

Number of Private School Students Owing Money 

1997 & 1998 

250,000 

Number of Students 

200,000 

150,000 

100,000 

50,000 

0 


1997 1998 

e. The average amounts owed by upper secondary school students is quite large, in 

spite of their small numbers, due to the higher tuition and fees involved at that 

level of the education system. Although comparable figures are not available for 

the public schools, there is every reason to believe that the nature of the financial 

impact is at least as severe in that sector. 

f. These indicators from Figure 2 and Figure 3 show that the relative magnitude 

of the initial crisis in Thailand was very serious, exceeded by a significant margin 

only in Indonesia. However, the more recent trends suggest that the recovery in 

Thailand may be somewhat more rapid than in nearby countries. The proportional 

rebound in both currency and asset values for Thailand was greater than for any 

Asian country except Korea, and appears to be maintaining that pattern. The value 

of the Baht dropped to 55/$1US in 1998, but has been trading at approximately 

36-38/$1US during the first quarter of 1999. However the effects on the 

population and on the educational system cannot be expect to dissipate rapidly. 

Therefore the need for appropriate reform measures remains strong. 

1.3. Implications of the financial crisis for educational finance 

1.3.1. Main themes 

a. The implications of the financial crisis for educational finance can be described 

in terms of three basic themes. One is the strain the crisis places on Government 

resources, reducing the amount available for direct support of education. A second 

is the impact of the crisis on individual and households income, reducing their 

ability to afford the costs of education. The third theme is the relationship of the 

crisis and its effects with the Government’s current educational finance reform 

initiatives. In relation to the first theme, it has been necessary for the Government 

29



to reduce budget allocations to education for the current fiscal year (described 

below in Section 3.2). While these have been substantial budget reductions, the 

short-term impact on the educational system may be relatively small, due in large 

part to the budget reduction strategies employed, as described in a later section. In 

relation to the second theme, the impact of the crisis on persons and households 

has reduced abilities to bear the costs of education due to increased unemployment 

and under-employment, higher prices for some goods and services, and increased 

mobility. The expected results for education would be loss of enrollments due to 

inability to pay tuition and fees, or late payment of tuition and fees, increased 

student loan demand and default rates, or shifts in enrollments from higher cost 

private schools to public schools where available. Some of these impacts have 

been observed and are discussed in Section 1.3.2 below. In regard to the third 

theme, there is a close connection between the immediate responses to the crisis, 

especially in terms of the Social Sector Program Loan (SSPL), and the more 

general finance and more general education reform initiatives currently underway. 

Some of the conditionalities incorporated in the SSPL are significant finance 

reforms in their own right, intended to promote greater equity and efficiency in the 

educational system, such as fiscal autonomy for higher education institutions. And 

the more general policy initiatives, such as expanding the scope of free basic 

education to the first twelve years, and decentralizing administration, can help 

ameliorate crisis impacts as well as achieve long-term reform goals. Because the 

SSPL conditions and the other reforms are closely related, they are both 

incorporated in the review. 

b. It should be noted that the reform process and budget decision making are 

ongoing in Thailand. Therefore the actual budget allocations for the current or 

future fiscal year are subject to changes at any time. Similarly, the specific details 

of reform initiatives and policy are under development as well. As a result, the 

budget figures and descriptions of reform initiatives reported here might not be 

consistent with current state of affairs in Thailand. Revisions will be made as 

necessary. 

1.3.2. Budget adjustments 

a. As a result of the crisis, there was a reduction in the original education budget 

allocation for the 1998 fiscal year. The initial 1998 basic education budget 

allocation was 98,104.73 million Baht. This was reduced approximately 7.8 

per cent (7,624.16 million Baht) to 90,480.59 million Baht. While a substantial 

reduction, this must be viewed in the context of the overall pattern of budgets 

for education. The reduction results in a drop in the proportion of basic 

education budget to GDP, down to 1.78% from 2.0% in 1997. Even after the 

reduction, however the basic education budget remains a higher proportion of 

the national budget (11.3%) compared to the previous year (9.95%) (without 

reduction the basic education budget is 12.26% of the total budget). This patter 

indicates a continuing high commitment of Government funds to basic 

education. 

30



Table 1 - Adjustments to education budget, 1998 

(%) 

Project/Department 

Reduction 

1. School lunch program 2.7 

2. General administration 15.7 

3. Pre-compulsory education 7.0 

4. Primary education 7.7 

5. Equal opportunity in education 9.6 

6. Supervision and monitoring 0.9 

7. Education evaluation 11.8 

8. Education standards 27.0 

9. School health 1.6 

10. Education research and development 20.8 

11. Personnel development 66.7 

12. Teaching development 22.0 

13. Pre-compulsory education (BMA) 0.9 

14. Primary education (BMA) 1.8 

15. Equal opportunity (BMA) 25.1 

16. Primary education, Central office (DOCA) 6.0 

17, Compulsory education (DOLA) 0.6 

18. Primary administration (DOLA) 0.9 

19. Equal opportunity in education (DOLA) 22.3 

20.Teaching training and seminar (DOLA) 20.7 

21. Child development (Dept. of Community Devel.) 10.6 

Total reduction 7.8 

Total Basic Education budget reduction 7.8 

Source: The Bureau of the Budget 

b. As can be seen in Table 1 above, the reductions in some areas (such as 

Personnel Development and Standards) are very large, with virtually zero 

reductions in other areas. One way to interpret the pattern in the reductions is an 

attempt to protect core program areas and direct services to children at the 

expense of indirect or more discretionary areas (such as personnel development, 

research and development, or standards development). That is, outlays can be 

reduced without much immediate impact on basic services and operations by 

foregoing investment in staff development and maintenance, or in new initiatives. 

This is not an effective strategy for longer-term savings, since the costs of 

“catching up” with deferred maintenance and development of staff and programs 

can rise exponentially with longer delays. But as a strategy it does indicate both a 

commitment to protecting basic services and an optimistic expectation of a 

relatively short time for economic recovery. 

c. This budget reduction strategy was reflected in decisions taken at the provincial 

levels as well. Part of the responsibility for making budget reductions for the 

current fiscal year was delegated to the provincial education offices. The 

31



provincial officers were given budget reduction targets (e.g., ten per cent 

reductions in primary education), but were allowed to decide in what budget 

categories to take the funds. The provincial education officers interviewed for this 

project reported very similar decision patterns. They did not take across-the-board 

reductions, but concentrated in reductions for those discretionary areas where the 

impact on basic or core program operations would be minimized. 

d. The implications of this situation for the longer-term improvement of education 

finance are mixed. The positive aspect is that short-term responses to the crisis 

have been effective in minimizing the possibility of serious immediate damage to 

basic programs and direct services to students. This strategy can be thought of as 

buying time for effective longer-term strategies to be put in place to deal with 

crisis-related financial problems. However the negative aspect of this approach is 

closely related, namely that the responses are appropriate only for the short term 

and do not provide a basis for sustained budget reductions or more fundamental 

reform of the finance system. In addition, the financial crisis provides an 

opportunity to re-examine the finance arrangements and create reforms responsive 

both to immediate needs and problems of longer standing. The additional 

problems and issues are described in some detail in the context of the SSPL Loan 

conditionalities discussed in the following section. 

1.3.3. Social sector program loan (and ADB conditionalities) 

a. The goals for the social sector program loan combine a concern for alleviating 

the more immediate effects of the financial crisis as well as addressing some of 

the more fundamental reform goals for the educational system. This can be seen in 

the summary of the conditionalities shown in Table 2 below. These are 

summarized from the Policy Matrix developed by the Government and ADB to 

guide the implementation of the SSPL. 

32



Table 2 - SSPL policy matrix conditionalities 

To be completed Prior to Feb., 1998 

1. Increase budget for student loans to B17,100 million 

2. Ensure female students benefit equitably from loan program 

3. Establish monitoring for science, math, and foreign language teaching 

4. Maintain teacher training and instructional material budget for science, math & foreign language at FY 97 levels 

5. Control hiring of primary teachers to bring student/teacher ratio to 25:1 

6. Government confirms plans for higher ed. Institutions to manage non-salary budget by 2000 

7. Government allow all higher ed. institutions to reallocate 5% of budget between items 

8. Government maintain budget share of primary and secondary funds outside Bangkok at pre FY97 levels 

9. Amend Human Resource Development Fund regulations to allow access from private schools 

To be completed prior to March, 1999 

1. Cabinet approve draft law for independent school inspection and performance based management 

2. Increase budget to general secondary relative to vocational education by 5% 

3. Reduce ratio of public upper sec. voc. ed. Enrollments to total public upper sec. to 1990 level, over 1998-2001 

4. Cabinet approve draft law for teacher personnel and salary system for local employment 

5. Cabinet approve draft law to reduce staff at MOE by at least 25% 

6. Universities granted authority to manage non-salary current budget 

7. Cabinet approve draft law for phased delegation of selected management functions to local schools 

8. Delegate to vocational school and skill centers authority and responsibility for program, personnel, and finance 

9. Confirm commitment to make all public universities autonomous by 2002; one by 1998 

10. Cabinet adopt policy to avoid crowding out private schools, equitable regulation, and set own fees 

Source: Asian Development Bank Loan Program Report, p. 56-57 

b. All of the conditionalities in the SSPL have some budget implications, but they 

vary considerably in their relevance to this review. The items to be completed 

prior to Feb., 1998 predate the activities of this review and therefore represent a 

base of completed policy or budget action on which to base analysis or 

recommendations, or in some cases are relevant to other components of this 

project and are treated there. 10 Among the items due for completion in March, 

1999, several are major education finance concerns. Two of the items involve 

specific budget allocations or related decisions: reduction of MOE staff by 25 per 

cent, and increasing the general vs. vocations education budget ratio. The item 

calling for independent school inspection and performance-based management, 

while arguable linked to efficiency concerns, is not a finance matter and is 

therefore outside the scope of this review. Five of the remaining items involve 

delegation of financial decision-making authority to the local school or campus, 

and thus will change the budget process in fundamental ways. This is a shared 

concern of this review and the decentralization component, and so will be 

discussed in both reports. The call for policy changes relative to private school 

operations and finance will be discussed in the sections dealing specifically with 

private education. 

10 

Policies and budget actions respecting the student loan program are discussed in the separate report on 

that subject (see Vol. II/4). The matters dealing with decentralization and devolution of financial authority 

are to some extent in this review and also in the decentralization report (see Vol.II/1). 

33



1.4. Educational reform initiatives 

Major educational reform initiatives are underway in Thailand, not all of which 

are directly results of the financial crisis. As this review began, the Government 

was drafting a new Education Bill, with important changes in financial, 

administrative, and pedagogical policies, all of which have significant 

implications for this review. The main substance of these reforms is discussed 

briefly here, and referred to later in relation to specific finance recommendations 

developed in the review 11 . 

1.4.1. Free basic education 

a. One of the most important and far-reaching of the initiatives in the new 

Education Bill is the extension of free basic education to include the upper 

secondary level (grades 10-12). In the words of the Bill: 

"Basic education” means education that extends from the primary to the secondary 

level." (§3) and "In the provision of national education, all individuals shall have 

the right to receive nation-wide basic education of quality, free of charge, for the 

duration of at least 12 years in conformity with the criteria and procedures 

stipulated in the ministerial rules." (§7 Ch. 2) 

The Bill does not make upper secondary education compulsory, but it does expand 

the range of “basic education” through the secondary level, and requires 12 years 

of education to be free of charge. 

b. Granting a right to receive basic education through the secondary level implies 

open access to that level as well as the lower ones. Thus control of entrance to the 

upper secondary level through examinations may no longer be permissible. In 

examining this issue the National Education Commission has gone beyond the 

language of the Bill to consider the issues of access and compulsory attendance. 

However, the Office of the National Education Commission has 

deliberated that secondary education has become basic education for 

all in the period of the Eight National Education Development Plan 

(1997-2001). As a result, it is envisioned that by the year 2001 there 

will be no entrance examination to secondary schools and admission 

will be based on the consideration of those living in the school service 

zone. (ONEC, 1997 #2, p. 81) 

Of course if applications to the more desirable schools exceed the number of 

places, selection by examination or other screening devices may be used as they 

11 The provisions of the Education Bill discussed here are taken from the most recent draft available at the 

time of this initial drafting (Oct. 12, 1998). However, the Bill was not in final form and was under review 

when this report was prepared. Therefore there may be major differences between the provisions in the 

current version of the Bill and the material presented here. Appropriate revisions will be made as more 

recent translations of the Education Bill become available. 

34



are now at the lower levels. A right to access to the upper secondary level of 

education does not necessarily guarantee admission to any particular school. 

c. While this is a major policy change, it is not clear how large the immediate 

impact of the change or the budgetary implications will be. An increase in 

subsidies will be necessary to replace the loss of revenues to existing upper 

secondary schools. However, since the existing proposal does not specify full 

details, it is not clear what “free of charge” will mean when applied to the full 

range of costs of attending upper secondary school. Nor is it clear if the policy 

will extend equally to all forms of upper secondary education, such as the many 

forms of vocational programs. Since the unit costs of many of these vocational 

programs are much higher than for general programs, the necessary increase in 

subsidies could vary greatly depending on what is to be covered. The same issue 

arises in relation to the other fees and costs of upper secondary attendance. A 

more detailed analysis of these possible budget impacts is included in the section 

on private costs and revenue, Section 2.3 below. 

d. Lowering the cost of upper secondary education may also increase the number 

of students seeking places. There is at present a relatively low participation rate 

for upper secondary education generally; enrollment ratio estimates are 43.8% for 

1996, (OECD Report) and 47.3% for 1997 (ONEC data). So the potential 

population of additional upper secondary students it quite large. But this cannot be 

taken as evidence of unmet demand for upper secondary education places. By 

contrast, transition rate estimates (proportion of lower secondary school 

completers who enter upper secondary) are quite high, suggesting those currently 

eligible for entrance to the upper secondary level do find places. The low 

enrollment ratio represents larger numbers of students who do not enter or 

complete lower secondary education. It is therefore not clear what the likely 

increase in demand will be. It may be small in the short run, as attitudes and 

expectations for schooling change slowly. But in the longer run, increased 

participation rates in upper secondary, and later tertiary education can be 

expected, as a result both of social changes and Government policy initiatives. 

1.4.2. Student count driven allocation system 

a. The move to free basic education for the first twelve years is accompanied by a 

major shift in the process for allocating subsidies as well, referred to as a student 

count driven allocation system. In the language of the Education Bill: 

"Budgetary allocations for all levels of basic education provided shall be 

based on appropriate per head expenditures for each level to be distributed 

equally regardless whether the education is provided by the State or the 

private sector." (§46 Ch. 7) 

As described in this version of the Bill, this distribution system would change both 

the process of budget allocations for government funds, and open up possibilities 

for attendance at both Government and private schools with full Government 

support. 

35



b. This procedure for budget allocation represents a major departure from the 

current budget allocation process. Under this system, once implemented, the 

government revenue received by each school would be determined by simply 

multiplying the number of students enrolled by the per-head amount for each 

level. Under the present budget system, by contrast, allocations to the schools 

come in a complex mix of allocations. The largest single allocation to 

Government schools is of staff, whose salary is paid directly by the Government. 

In addition schools receive subsidies, funding for equipment, buildings, supplies, 

special projects, lunch programs, and several other categories. Private schools do 

not receive staff directly, but receive subsidies and support for a variety of 

projects and programs. So it would appear that substituting a student-count driven 

system for the current process could lead to substantial shifts in actual allocations. 

c. However this appearance may be deceiving. While the current budget allocation 

is complex in terms of the number of categories and controls, much of the actual 

allocation is based on or strongly influenced by a school’s enrollment. The 

number of teachers to which a government school is entitled is based largely on 

enrollment (class size standards), as is the size of budget for many routine 

expenses and lunch programs. Subsidies for private schools are on a per head 

basis as well. Funds for special programs, quality improvement, capital 

investment, etc. are allocated on more of an ad hoc basis, but these make up a 

relatively small proportion of the budget overall. In fact the largest current 

variation in Government allocations per head may be caused not by budget 

decisions at all, but by the tendency of more experienced, higher paid teachers to 

gravitate to more desirable schools. The discussion of student count allocation 

mechanisms in the later section examines the linkages with current budget 

allocation mechanisms more closely to assess the extent of the differences and 

implications for overall administration. 

d. The student count driven system also has potential to shift attendance patterns 

among schools, with resulting budgetary and administrative impacts. The 

operation of such a system implies some additional opportunity for choice making 

by parents and students as to where children attend. Students could seek places in 

a more desirable government school, or if they are included in the system, a 

private school which the parent could not otherwise afford. Of course, the 

opportunity for choice may be illusory if no actual choices are available within an 

acceptable distance, due to lack of places in other schools or the absence of an 

alternative school altogether. As part of this review a study was conducted of 

parent references with regard to school choices under a possible system that 

provided a choice of any school, public or private, without charge. 

e. The degree to which this allocation mechanism will affect actual budgets will 

also depend on the way the per-head calculation is made, and the way students are 

counted. The largest single cost factor in basic education is salaries. If salaries are 

included in the per-head calculation, the implications for teacher allocations and 

local budget control are quite important. These are discussed in some detail in the 

section on budget recommendations below (Section 10.2.1). Similarly, a number 

of schooling expenses are borne by parents, such as tuition, fees, uniforms, 

transport, etc. The Education Bill language calling for basic education to be “free 

36



of charge” could be interpreted to include these expenses as well. This would 

greatly reduce the household expenditure for education, adding 10-20 per cent to 

the Government education budget. 

1.4.3. Decentralization 

a. Current reform efforts include a number of decentralization initiatives. The 

SSPL conditionalities (Table 2 above) include seven provisions for increasing 

budget or administrative autonomy in schools or higher education institutions. A 

major component of this project is a review of existing decentralization proposals 

and recommendations for policy and implementation. 

b. The budget allocation based on enrollment or attendance is linked to 

decentralization and the teacher personnel system as well. A student count driven 

finance system suggests potential decentralization. While not specified in the 

current bill, the concept implies that the allocation to schools based on student 

count will be a lump sum, rather than the existing mix of in-kind and categorybound 

allocations. If the allocation includes staff costs, then staff may no longer 

be allocated to schools, but rather hired at the local level using the local budgets. 

This would, of course, alter the entire teacher personnel system (as referred to in 

the conditionalities above). Even if staff costs were not included, the student count 

allocation would mean a shift in the control of local financial decision making 

from the Central to the local levels. This has very important implications for the 

staffing and function of education administration at the Central and Provincial 

levels. These implications and policy changes are treated in relation to finance 

issues in this review and in further detail in the report on decentralization. 

1.4.4. Teacher reform 

A major analysis of teacher reform issues is currently underway as part of this 

larger project and a comprehensive reform of teaching is underway as a separate 

Government activity under the auspices of a special Commission. Therefore there 

is not detailed treatment of teacher reform and development in this review. 

Instead, where financial issues have significant implications for teachers or the 

personnel system, these are noted. The primary ones included below are 

discussions of the implementation of a student count driven budget scheme, 

concerns for equity in allocation of educational resources, and improvements in 

information resources and systems for administration and policy analysis. 

1.4.5. Efficiency and equity initiatives 

a. Some additional reform and development initiatives are aimed primarily at 

improving efficiency or effectiveness in some component of the system. These 

include initiatives to develop improved monitoring capacity, performance based 

management systems, and overall increasing budget autonomy. These do not 

receive separate attention, but are addressed as parts of related finance issues. The 

monitoring and management systems are discussed in the context of improved 

information resources for management. The increases in budget autonomy and 

discretion are treated in the sections dealing with the overall budget process. 

37



b. Equity considerations are important elements in both the design for this review 

and in the policy and reform initiatives. The new Education Bill sets forth 

requirements for equity in resource allocation in multiple places: 

"Individuals shall have the right to receive education and to participate in 

the educational process and shall enjoy equal opportunities in lifelong 

learning without any discrimination, depending on his capabilities and 

interests."(§9 Ch. 2) 

"Persons with physical, intellectual, emotional, social, communication and 

learning deficiencies, those who with physical disabilities, and those 

destitute or disadvantaged or specially gifted; shall have the right to 

receive basic education similar to that provided for others or in appropriate 

forms in line with their needs and competencies as stipulated in ministerial 

rules." (§10 Ch. 2) 

"For budgetary allocations referred to in clause 1 [of §49], the State shall 

provide additional funds for those with physical, intellectual, emotional or 

social deficiencies, physical disabilities, the destitute or disadvantaged, 

those living in remote areas, the poor or the gifted or State special policy 

projects." (§49 Ch. 8) 

The basic policy approach to equity appears to be a combination of an equal basic 

entitlement to basic education support for all (the basic allocation) plus the 

additional funds referred to above for special needs or circumstances of various 

sorts. The Bill does not elaborate, however, on how these additional amounts are 

to be decided or allocated. The equity-related portion of this review will discuss 

these issues in the context of the overall finance scheme, but does not make 

specific recommendations about funding amounts for special needs or 

circumstances. 

1.4.6. The role of the private sector 

a. A major element of the Government’s educational policy initiative is the 

mobilization of greater local and private support for education. This is reflected in 

sections of the new Education Bill: 

"Resources shall be mobilized from the State, local administrative organizations, 

educational institutions, and the private sector for utilization in the provision of 

education." (§48 Ch. 8) 

"The local administrative organizations shall allocate an appropriate portion of 

their income to match State grants for education funding." (§52 Ch. 8) 

"Individuals or legal entities donating properties for educational purposes shall 

receive tax exemption for the values of such properties. The taxes for real property 

transfer shall also be exempted as provided by the law." (§55 Ch. 8) 

38



b. These initiatives are more than attempts to increase educational funding, or 

reduce the burden on the Central Government, though they can certainly have that 

effect. Much of the discussion and written rationale for increasing educational 

financing as private support is aimed at increasing feelings of ownership and 

greater involvement in education. By this reasoning the education system is 

currently seen as the Central Government’s problem or responsibility, since it 

pays most or all of the bills. This is thought to promote lack of concern and 

commitment on the part of parents and local communities. These initiative are 

designed to involve parents, local authorities, and parents more directly in the 

financing of the schools, thus increase their overall involvement and commitment 

to education, which intern leads to overall quality improvements. The analysis of 

these issues and initiatives undertaken here will concentrate primarily on the 

feasibility of achieving significant increases in such local and private financial 

support for education, not the impacts on attitudes and commitments. 

39



2. Review of educational finance in Thailand 

2.1. National budget: structure, process, and allocations 

2.1.1. Overview of the education budget 

A government budget can be viewed a number of ways; among them are as a way 

of organizing and presenting financial information about government activities, as 

a process of decision making about the use of government resources, or as a plan 

to direct and control how those resources are used. A comprehensive 

understanding of the budget and how it works in the finance system requires 

looking at the budget from at least these three points of view, as will be done here. 

The first section describes the different ways the government budget organizes 

and uses information for different purposes. The second section describes the 

budget decision making process. The final section examines the outcomes of the 

budget process in terms of allocations and expenditures. Each section focuses 

attention on the aspects of the budget and finance system in relation to the main 

purposes of this review, and are not intended to be exhaustive discussions of the 

overall topic. 

2.1.2. Education in the National Budget 

a. When the national budget is viewed in terms of major sectors of activity, 

education is the largest by a substantial margin (22% in FY 1997), exceeding the 

social service sector by almost 60 billion Baht. The figures for the major sectors 

of the budget are shown in Table 3 below. 

Table 3 - National budget by sector, FY 1997 

Program Classification of Expenditures (in million Baht) 

Fiscal Year FY 1996 FY 1997 

Changes over 

the FY 1996 

Sector Amount % Amount % Amount % 

Agriculture 76,660 9.1% 83,964 8.5% 7,304 0.9% 

Industry and Mining 2,531 0.3% 3,006 0.3% 475 0.1% 

Transp. And Communication 86,091 10.2% 95,940 9.7% 9,849 1.2% 

Commerce and Tourism 6,737 0.8% 6,936 0.7% 198 

Science, Tech., Energy, Envir. 14,769 1.8% 19,515 2.0% 4,745 0.6% 

Education 169,561 20.1% 216,279 22.0% 46,718 5.5% 

Public Health 63,452 7.5% 75,023 7.6% 11,571 1.4% 

Social Services 120,351 14.3% 158,696 16.1% 38,346 4.5% 

Maintenance of National Security 107,897 12.8% 119,429 12.1% 11,532 1.4% 

Maint. Internal Peace and Order 40,407 4.8% 44,278 4.5% 3,871 0.5% 

General Services 106,752 12.7% 114,139 11.6% 7,387 0.9% 

Debt Services 47,992 5.7% 46,796.40 4.8% (1,196) -0.1% 

Total 843,200 100% 984,000 100% 140,800 16.7% 

Source: Bureau of the Budget, Thailand's Budget in Brief, Fiscal Year 1997 

40



Trends in the size of the education share have been continuously upward. The rate 

of growth in the education sector has averaged over 17% per year over the past 

decade, a rate exceeded by the economic development and the public health 

sectors at about 23%. These growth rates are compared with the other sectors of 

the budget in Figure 7 below. 

Figure 7 - Components of the National Budget by Sector 

Components of the National Budget by Sector, 1987-1997 

1,000,000 

900,000 

800,000 

Million Baht 

700,000 

600,000 

500,000 

400,000 

300,000 

200,000 

100,000 

0 

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 

Gen. Administration 

Other 

Debt Service 

Int. Peace & Order 

Defense 

Public Health 

Education 

Economic Dev. 

These trend lines show that the overall rate of increase of Government spending 

has been increasing in all sectors between 1987 and 1997. The reductions in the 

1998 budget show that the economic crisis has brought a halt to the rapid growth 

rates in Government expenditure shown in Figure 7. But the period of large 

investment in education shown here does provide a base of development that can 

be sustained through a period of cut backs through increases in efficiency and 

better financial management. 

b. The budget sectors shown in Figure 7 do not correspond fully to the sectors 

shown in Table 3. The organization of information and categories in the national 

budget has been revised over the past decade. 

2.1.3. Structure of the education budget 

a. The information in a budget must serve a variety of purposes, and is therefore 

organized and presented in a variety of ways. This is especially true of the 

education component of the national budget, since education is a complex 

government function, provided by many different branches of the government. To 

simplify, education budget information can be thought of as being organized to 

answer three separate questions: 

41



a.1. How are funds allocated in relation to the goals of the Government? 

a.2. How are funds allocated in relation to the government units responsible for 

their use? 

a.3. How are the funds used in terms of the types of goods and services 

purchased? 

Arranging and reporting the budget information to answer these separate questions 

results in a number of distinctive formats and budget structures. It also results in a 

problem common to virtually all government budget systems: a major difficulty in 

linking information about finances to the government’s plans and policy goals on 

one hand and actual government operations on the other. 

b. Budget and policy decisions and government plans express goals and 

directions. Budget information linked to the goals of the Government, for 

education or any other area, is organized into two types of related classifications: 

programs and functions. Programs are usually large categories or sectors of 

activities that all are intended to achieve a major goal, such as providing primary 

education services to the population. The basic program structure of the national 

budget is shown in the categories or sectors in Table 3. To provide more detailed 

information, each sector is divided into sub-sectors and specific programs. The 

education program structure includes seven sub-sectors, and a total of 27 separate 

programs. (The current sub-sector and program structure for the education budget 

is found in Appendix 8). The total budget allocated or expended in these program 

areas can be found in the standard budget documents and reports. 

c. There is no systematic relationship, however, between the sub-sectors or 

program categories and the organization of Government agencies. For example, 

there are single programs for primary school administration, primary school 

service, and primary school quality improvement. However responsibility for the 

operation of government primary schools fall under different units: the Office of 

the National Primary Education Commission (ONPEC) in the Ministry of 

Education, and the Ministry of the Interior, and the Bangkok Municipal Authority. 

Within the Ministry of Education, the operation and administration of schools fall 

under several separate departments. The same principle applies to higher 

education, and most of the other program categories. 

d. To complicate the matter even further, the Government has also adopted an 

alternative category structure to reflect the various goals of activities. These are 

the so-called functional categories used by the United Nations (found in 

Appendix 8). This scheme employs 14 major groups of activities (or programs), 

collected into four major groups: General Government Services, Community and 

Social Services (which includes Education), Economic Services, and 

Miscellaneous. These 14 groups are very similar to the 12 programs shown in 

Table 3. As a result, program-type reports and publications of Government 

finance may not be fully consistent, depending on which program classification 

scheme is used. 

e. Budget analysis also includes concern for how funds are spent in terms of the 

objects of expenditure, i.e., the specific kinds of goods and services purchased. 

This analysis is concerned primarily with the efficiency and effectiveness of the 

42



mix of resources purchased with government funds. Therefore the budget requires 

a category structure which reflects the various objects of expenditure, and how 

they are linked back to both the goals (programs) and responsible administrative 

agents or government units. 

f. Thus to examine how actual operations and expenditure of funds map onto 

programs and goals, it is necessary to establish linkages across many layers of 

information and organizational boundaries. The existing government accounting 

structure does provide a way to code and organize budget information in a way to 

establish some of these linkages. The conceptual structure of the accounting 

system shows how levels of coding can provide a basis for linkages across the 

various levels and programs. 

f.1. Program Structure (Sector, sub-sector, program, sub-program, task/project) 

f.2. Functional Area/Economic Classification (12 categories) 

f.3. Work Plan (A=administration; B=Service; C=Quality Improvement, etc.) 

f.4. Organization Account (capital or current, object of expenditure, salary, etc.) 

g. This accounting structure provides the conceptual basis and raw information for 

potentially answering most of the analysis and management questions referred to 

above. However, there do not appear to be adequate organizational capacity or 

arrangements at the national level to employ this information as effectively as 

possible. As a result there is a plethora of inconsistent formats and budget reports, 

and considerable difficulty in obtaining financial or other management-related 

information in a form useful for many kinds of management or policy analyses. 

There does not appear to be a mechanism in place at the national level to 

coordinate educational finance statistics, establish standards for analysis and 

reporting, or otherwise exercise authority over critical educational information. 

Instead, authority and responsibility for analysis and reporting educational finance 

and related information is shared in various ways across the Ministry of 

Education, the ONEC, the NESDB, the Budget Bureau, and other ministries with 

education and/or training programs. This problem is discussed in more detail in 

the section on management information systems and resources. 

2.1.4. The education budget process 

Decision making for education budgets occurs by distinctive processes at different 

levels of the educational system. Because the education system is rather highly 

centralized at present, much of the important decision making takes place within 

the national level. But there does exist important financial decision making 

discretion at the provincial levels, and at local schools and higher education 

institutions. Therefore a comprehensive review of the budget process is necessary 

to explore the linkages among the levels, and to explore the way actions at one 

level affect the others. For this review administrators at the various levels of the 

government were interviewed concerning budget practices, and detailed budget 

information was collected from a number of government agencies and local 

schools. Additional budget process information was obtained from budget 

documents and studies of the process, especially Senarith (1995). 

43



2.1.4.1. Basic elements of the budget process 

a. Budget decision making takes place in the context of a budget cycle. That is, 

assembling a budget for the various levels of education is a recurring process, 

requiring the same steps to be repeated at regular intervals. The participants in 

the budget cycle at the national level are the Ministries and agencies, the main 

finance policy organizations: Bureau of the Budget, Bank of Thailand (BoT), 

National Economic and Social Development Board (NESDB), and the cabinet. 

Prior to 1998, budget cycles for the national budget have followed a cycle, 

roughly as shown in Figure 8 below. As a result of the financial crisis, 

however, there have been modifications in the budget making process for 

education (and other ministries). The current process departs from this pas 

patter in important ways, and the Bureau of the Budget is introducing 

procedures to make the decision-making process more collaborative with the 

ministries. 

Figure 8 - Typical national budget cycle 

Steps in the Budget Cycle Oct. Nov Dec. Jan Feb Mar Apr May Jun Jul Aug 

Budget Bur. Informs Ministries of budget calendar x 

Ministries prepare policies for budget prep. xxxxxx 

Ministries prepare details of proposals xxxxxxxxxx 

Min. of Fin., Budget Bur. NESDB, BoT set ceilings 

xxxxxx 

Ministries submit Budget Proposals 

x 

Budget Bur. reviews proposal details 

xxxxxxxxxxxx 

Cabinet approves budget Ceilings x 

Cabinet approves budget details xx 

Ministries & Budget Bur. adjust proposals 

xx 

Budget Bur. approves final proposals xx 

Cabinet approves final proposals x 

Budget Bur. published draft Budget Act 

xxx 

Cabinet appoves draft and forwards to Parliament x 

Parlaimant reviews & approves Budget Act. 

xxxxxxx 

b. Under this revised process, the basic features of the process remain largely the 

same, but a number of significant details are new. At the beginning of the cycle 

the Bureau of the Budget (BOB) receives the basic framework (targets and 

ceilings) and any special expenditure controls for the new budget from the Prime 

Minister and other top Government officials. The BOB then works with Ministry 

to calculate what is referred to as a "fixed cost budget," which represents the base 

of contractual obligations and other commitments over which there is little 

discretionary control. It also includes what are considered basic operations, and 

the funds sufficient to maintain these operations. Special projects can be kept in 

the "fixed cost" category for 3-4 years. 

c. Fixed cost budget is used as base from which to set an overall budget ceiling for 

the coming fiscal year. The ceilings are then discussed with the Ministry at two 

levels: the Director of BOB working with Minister and Planning Office head, with 

44



lower level staffs of the BOB and Ministry working in parallel on lower level 

detail. This interactive process works from the "fixed cost" base through requests 

for additional funds and programs, up to the eventual budget proposal. BOB is 

also attempting to initiate a program of working more closely with Ministries to 

hold hearings to set budget ceilings in a more open process. Previously, the ceiling 

were worked up within the BOB and then given to the Ministries. 

d. Allocations to the Ministry level are the main concern of the decision making 

process at this level. The allocation to the Ministry includes guidelines and 

standards for allocations below the Ministry level, but these standards are not 

intended to control all the lower level allocations. The guidelines and standards 

are set in a way that recognizes a certain amount of operational/political 

adjustment is necessary in allocations within Ministry programs and units. If 80% 

or more of the allocations are within guidelines, this is considered sufficient. 

Ministries therefore will have approximately 20% leeway to allocate resources 

within their domain, outside constraints and guidelines set by the BOB. 

e. Additional modifications to the process are planned for 1998. Beginning in 

Nov-Dec., the BOB officials will meet with ministries for a review of the budget 

situation. These meetings will include Ministers, Permanent Secretaries and the 

BOB Deputy Dir. Members of the BOB staff will work with Policy and Planning 

Bureau staff in the Ministries, and the Office of Under Secretary. Separate 

meetings are planned for the Ministries of Education, University Affairs, and 

Interior. National government subsidies for municipal schools (primary and lower 

secondary) are allocated through the Ministry of Interior, including the Bangkok 

Municipal Authority, though the bulk of the education budget is allocated through 

the Ministry of Education. The BOB will introduces any new policy constraints 

and targets at this early stage in the process. Once the fixed cost budget is set, the 

parties can negotiate new programs and adjustment to be added/removed. 

f. The allocations within the ministries to departments and provinces, within 

provinces, and within schools follow a similar general pattern. Much of the budget 

decision making can be described as a mix of top-down and bottom-up processes. 

Top-down processes are those in which decisions at higher levels determine 

outcomes at lower levels. One of the most common top-down processes is one in 

which a limit or budget ceiling is set for some categories of expenditure, thereby 

limiting the amounts available for those categories at subordinate levels. Similarly 

higher levels of government set formula or allocation rules which determine 

amounts to various categories. Bottom-up processes are those in which the lower 

level actions influence or determine decisions and actions above, for example 

when budget requests from the provincial levels influence the amounts allocated 

at the national level. Both processes were found at the school, provincial, and 

national levels, as well as within particular agencies. At the school level, school 

heads construct their budgets based on a mixture of limits imposed by allocations 

and revenue limits from above, combined with shifting and mobilizing other funds 

where possible to respond to the requests of staff and community as well as the 

administrator’s goals. The same basic process could be said to characterize budget 

decision making as described at the provincial and school levels as well. The 

resulting budget at each level is the product of adjustment to constraints and 

45



allocation standards imposed from outside, negotiations and compromise in some 

areas, and mobilization of new resources in others. 

2.1.4.2. Strengths of the budget process 

When viewed this way, the budget processes observed in this review are highly 

functional and successful in many important respects, and suffer from flaws and 

weaknesses in others. The functionality and success are reflected in some key 

goals of a budget process: 

a. That the process is well understood and reasonably transparent. 

b. It is timely and effective in producing the necessary decisions when required. 

c. It helps establish a basis for sound administration by providing stable and 

predictable resource flows. 

d. It provides a basis for participation in and review of decisions. 

e. It provides a basis to control the flows and expenditure purposes for 

coordination with government policies and programs. 

At each level and agency of the system, administrators and staff were well aware 

of the mechanics of the budget process, could produce and explain budget 

documents and decisions, and were knowledgeable about budget administration, 

reporting, and controls. 

2.1.4.3. Problems of central control 

a. In spite of these positive aspects, however, there are a number of problem areas. 

Almost all of the officials below the top levels of Government view the decision 

making as too strongly influenced by the Budget Bureau and the resulting budget 

as too rigid and restrictive. The issue of excessive influence on resource allocation 

by the top levels of government is common to most countries. There is a natural 

tension between the interests of the top executive levels of government and those 

of the operating agencies, Ministries, or local governments. It is therefore 

expected that the participants in the lower levels of the process to see their 

counterparts above as exercising excessive control. So the important concern is 

not whether the Budget Bureau is viewed as “too powerful,” but whether the 

budget process allows for adequate participation, and whether there is sufficient 

flexibility in the resulting budget to allow for meaningful management and 

adjustment of resources down the levels. 

b. As for the first concern, that of adequate participation, the new process appears 

to be an important improvement. It appears to provide for substantially increased 

interaction between the BOB and the Ministries at the chief executive level and at 

the senior staff level as well. It also introduces interaction and adjustment at an 

earlier stage in the budget decision process, where it can be more meaningful. If 

this process is maintained or even improved, it will serve decision making well 

46



and provide a basis for higher quality budget decisions. It may also alleviate some 

of the tension between BOB officials and their ministry counterparts. However, 

improving opportunities for participation at the top levels of decision making is 

not enough. The allocation process within ministries or lower levels was often 

described as excessively rigid, and driven by allocation formulas and standards 

imposed from above. Improved decision making at the upper levels will not 

necessarily produce better budgets if the allocations at lower levels are the result 

of inadequate processes. 

2.1.4.4. Excessive budget rigidity 

a. There is also strong evidence that the budget imposes too many restrictions on 

management at lower levels. This was referred to most frequently as the “line 

item” problem. That is, the budget decision making process at the Ministry level 

and below determines not only the amount of funds to each unit and program area, 

but also the allocation of those funds across the objects of expenditure (salary, 

utilities, etc.). The final operating budget document is built up from the proposals 

aggregated from the school level to the Ministry, with the necessary adjustments. 

Once the budget is passed into law, it controls the use of funds back down to the 

school level and the individual line items. School principals, provincial officials, 

up to the Ministry level have to obtain BOB approval for shifts among budget 

categories. Such rigidity is bound to lead to inefficient use of resources and is a 

disincentive for effective management. 

b. The rigidity of the budget also tends to undermine the accuracy of budget data 

as a tool for management or assessment. When administrators have flexibility in 

adjusting budgets, they do so, and the resulting records are a reasonably accurate 

reflection of actual operations. When budgets cannot be adjusted, creative 

administrators may change operations, but their budget descriptions remain fixed. 

This is sometimes referred to as “category creep.” One example reported was a 

shift in how temporary wages were used. The original allocation was for teachers 

to perform a particular function in a fixed location. When the function was 

changed, the teachers were transferred to transient roles, but their salary allocation 

could not easily be changed, and so remained at the fixed location. The budget no 

longer reflects the actual expenditure in that or other locations. Such distorted 

budget data, if present on a large scale, can lead to serious errors in management 

or policy decisions. 

2.1.4.5. Incremental decision making 

Because the budget decision making involves such large amounts of detail, the 

opportunity for comprehensive analysis and review is limited. Participants in the 

budget process reported that the result is a largely incremental approach. That is, 

most of the basic budget components are increased in annual increments without 

detailed analysis. Attention is devoted more to special projects or new initiatives. 

One negative consequence is that newer schools are said to be disadvantaged, 

having gone through fewer budget cycles and acquired fewer increments. Also 

overall allocations are not reviewed in light of changing conditions or priorities 

47



and past spending patterns become institutionalized irrespective of their efficiency 

or appropriateness. 

2.1.4.6. Teacher allocation 

a. Two problems in the distribution of teachers are related to the overall allocation 

of resources to schools and impacts of the financial crisis. These are shortages of 

teachers overall and maldistribution of teachers among schools. These distribution 

problems appear to be the result of a combination of financial and administrative 

policies, as well as consequences of financial pressures. The administrative 

policies are described briefly here, and examined in more detail in the report on 

decentralization and teacher reform. The financial issues receive more detailed 

attention. 

b. Teacher allocation among the provinces is handled for each type of school by 

their respective Departments in the MOE. For primary schools and ONPEC Pilot 

Schools the allocation of teachers to the provinces is decided in Bangkok by the 

Office of Teachers’ Civil Service Commission and ONPEC, using a per pupil 

formula. This formula is adjusted to accommodate particular policy or program 

needs. For the ONPEC Pilot Schools, for example, at least one secondary science 

teacher per school is specified, even if that results in a total number of teachers 

exceeding the formula calculation. A similar allocation process operates for the 

secondary schools under the Department of General Education (DGE). Teachers 

for DGE schools are allocated on the basis of a 1:25 teacher/student ratio. 

c. The allocation of teachers to schools within the province is the responsibility of 

the provincial offices. Allocation decision making differs between existing staff 

moving between buildings and assignment of new staff. For new staff, the number 

to which each ONPEC school is entitled is determined by the salary budget. 

However, ONPEC schools do not always receive the number of regular teachers 

that their salary budget would accommodate. In the Chiang Mai provincial office, 

the ONPEC administrators reported that the allocation from Bangkok is usually 

insufficient. In these cases, the provincial officers allocate the available teachers, 

in their words, to “best fit local needs.” The provincial office also attempts to hire 

temporary teachers to fill in where permanent teachers are not available. The 

Chiang Mai ONPEC office, for example, reported hiring 85 temporary teachers 

for the 1997-98 school year. For the DGE schools, the 25:1 ratio of students to 

teachers is the guide for allocations to schools. However this guideline cannot 

always be met, according to provincial officials, due to insufficient numbers of 

teachers in particular subjects. 

d. Transfers following initial assignments also affect the number of teachers 

available to each school. Teacher allocation is also effected through transfers, 

which are also managed at the provincial level. A teacher’s original assignment is 

for two years. After this initial period they may request a transfer. The requests are 

reviewed by a provincial-level committee, and approved when judged to be 

appropriate to the schools needs. This process is similar to that in the DGE 

secondary schools. 

48



e. The management of teacher transfers at the provincial level is desirable from 

the point of view of decentralization, but it does involve problems as well. 

Existing policies give the provincial officers authority to adjust the allocation of 

teachers among the schools and to control transfers. Teachers moving into a 

province are initially assigned by provincial officials. So an initial assignment can 

be used to remedy shortages if sufficient teachers are available for assignment. 

However, after two years, teachers are allowed to transfer if the receiving school 

has an opening, or after one year if the teacher arranges for an exchange in 

positions with a teacher from the other school. These requests for transfers require 

approval by a committee at the provincial level. 

f. Using administrative controls to achieve equitable distribution of teachers is 

unlikely to produce the desired result. Provincial officials already have the 

nominal authority to achieve an equitable distribution or meet certain critical local 

needs. Since provincial officers are closer to the schools and more familiar with 

these circumstances, it is reasonable to locate some decision-making authority at 

that level of the system. However, these officials readily admit that 

maldistribution remains a serious problem. In exercising these administrative 

controls, they must balance the needs of particular schools with the demands of 

teachers for more desirable assignments. There can be considerable pressure from 

individual teachers to move to more desirable schools. The less desirable schools 

typically have poor facilities and living locations are also most likely to be remote, 

or high poverty, or otherwise disadvantaged. In some areas, such as the hill tribe 

regions, the remote school populations may include large concentrations of ethnic 

or language minority children. Such assignment may be very undesirable for 

teachers from other areas or backgrounds. If allocations and transfers are 

responsive to these teacher preferences, the result can reinforce and exacerbate 

already serious inequities. 

g. However, provincial officials cannot ignore teacher preferences either. A 

teacher that is unhappy with the working and living conditions is not likely to be 

very effective. Neither are large cultural differences between teachers and students 

conducive to effective instruction. For example, Chiang Mai provincial officers 

reported that Hill Tribe children often have difficulty understanding the accent of 

teachers from other regions. Moreover teachers required to work in undesirable 

locations are more likely to seek other employment and leave teaching as well. 

Therefore maintaining some balance of teacher preferences with school needs is 

necessary. What is needed are means to tip that balance in favor of the schools and 

children with the most pressing needs. 

h. Changes in the financial and budget policies may provide some leverage to tip 

the balance in the desired direction. Financial and budget arrangements can be 

used to provide greater incentives for teachers to work in otherwise less desirable 

schools. More provincial and local discretion over salary budgets could allow 

some schools to become more desirable by offering higher salaries or other 

financial incentives. Some provincial officials were skeptical that such incentives 

would have large effects. But since they have not been seriously attempted, such 

incentives may prove to have positive results. Provincial officials also reported 

that school principals deliberately compete for teachers by seeking donations and 

49



funding for special projects to improve school facilities and programs. If a school 

is seen as moving up in reputation, due to such improvements, teachers are more 

likely to seek transfers there. Changes in budget and finance policies could 

provide funding and discretion for financial incentives for individual teachers as 

well as special development funds to make remote school more desirable. This 

could reduce the maldistribution of teachers as well as result in overall quality 

improvements in disadvantaged schools. 

i. If local school officials were given the authority to determine teacher and other 

staff salaries, their budget discretion, and ability to achieve increases in efficiency 

would also grow considerably. This was pointed out in interviews with primary 

school principals in particular. One school, for example, was using two teachers 

receiving full teaching salaries for clerical and low-level administrative duties. 

These were the only staff available to the principal for these tasks. The teachers 

were already allocated to the school, and she did not have the discretion to use 

their salaries to hire lower paid workers, freeing up funds for other uses. This was 

clearly an inefficient use of resources, and had a negative impact on the morale of 

the teachers as well. Such inefficiencies are unavoidable when local 

administrators have no control of such key resources. More efficient use of 

resources could also help improve school facilities, programs, and other amenities, 

making, resulting in schools more desirable places to work. 

2.2. Government expenditure issues 

a. Educational support is clearly a high priority for the Government, both in terms 

of expenditure levels and in national planning. This fact does not, however, settle 

the issue of whether support levels are sufficient. This section explores the 

evidence related to the question of whether the Royal Thai Government is 

spending enough on education. That questions is explored in terms of current 

plans and goals, comparisons with other countries, and what appear to be pressing 

needs growing out of the economic crisis and plans for economic recovery. 

b. The overall conclusion reached from the exploration is that in the aggregate 

Government financial support for education is adequate by some standards, but 

not by others. Total government spending for education in Thailand is comparable 

to other countries in the region, and is not low in terms of wider international 

comparisons. Financial allocations among levels of education and across various 

types of expenditure are largely sound in terms of international comparisons and 

financial criteria. There are, however, a number of problem areas identified in the 

analysis. These include high levels of subsidies to higher education relative to 

primary and secondary, and some disparities in the allocation of resources across 

provinces and regions. Plans and current policy initiative also indicate that there is 

wide dissatisfaction with the heavy reliance on the central government as the 

primary source and allocation mechanism for educational finances. Therefore new 

decentralization policies and financial autonomy may have major impacts on 

financial allocations. 

50



2.2.1. Adequacy of allocations to the education sector 

2.2.1.1. Education as a share of GDP 

a. The level of overall spending on education has been a relatively high 

proportion of the Government budget and of the overall level of economic 

activity as measured by the Gross Domestic Product (GDP). The pattern for 

the education share of the Government budget over the past 20 years is shown 

in Figure 9 below. Some substantial fluctuations in the education share of the 

budget are evident in this record. There appear to be three distinctive periods 

over this time span. The 1978-85 period shows a very stable percentage at 

roughly 20%. The period 1985-1990 shows a drop in the education share, 

down to less than 17 per cent in 1989. From 1991 to 1996 the share returns to 

a fairly stable 20 per cent for six years. This is followed by a sharp upturn in 

1997 and 1998. Over this time span Thailand’s education share of the national 

budget has been equal to or above other Asian countries. But these 

fluctuations are large enough to require further attention. 

Figure 9 - Education as a per cent of the national budget, 1978-97 

Trends in the Thai Education Budget and GDP 

% of GDP 

4.5% 

4.0% 

3.5% 

3.0% 

2.5% 

2.0% 

1.5% 

1.0% 

0.5% 

0.0% 

30.0% 

25.0% 

20.0% 

15.0% 

10.0% 

5.0% 

0.0% 

% Change in GDP 

1978 

1980 

1982 

1984 

1986 

1988 

1990 

1992 

1994 

1996 

Ed. Budget as % GDP 

% Change in GDP 

b. When the share of education as a proportion of GDP is examined over the same time 

period, possible causes for the shifts in the education share are evident. In Figure 10 

(below) education expenditures as a per cent of GDP are plotted along with changes in 

the GDP. When viewed on the same plot, the two time series show clear counter-cyclical 

changes; when one goes up, the other goes down. One way to interpret this pattern is that 

education represents such a large and important proportion of the budget, involving so 

many people and institutions, that it can be changed only slowly. Therefore in time of 

slowing economic growth, say 1980-85, the overall Government budget may shrink, but 

51



the commitment to education and therefore the absolute size of the education share will 

remain high, becoming a larger percentage of the total government budget. By contrast in 

periods of more rapid economic growth, say 1986-98, the education share drops. The 

same pattern is observed in the latest period, in which the economy slows and the 

education share rises again. 

Figure 10 - Trends in Thai education budget as % of GDP 

Education as Per Cent of National Budget 

30.0% 

25.0% 

20.0% 

15.0% 

10.0% 

5.0% 

0.0% 

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 

% of RTG % of Malaysia % of Indonesia % of Philippines 

c. When compared with other countries, the expenditure on education in Thailand 

as a share of the GDP is quite similar, and shows a relatively high level of effort. 

However, there is not a single group of Asian countries that form a fully 

satisfactory comparison group for Thailand. Since Thailand is a member of 

ASEAN, that group of nine countries forms a basis for regional comparisons. 

However, this group also includes low-income countries (by World Bank 

classification) which do not necessarily make for valid comparisons with 

Thailand, a middle income country. In addition, it is also useful to view 

comparisons with higher income countries, such as the OECD members. 

Thailand’s history of rapid and successful economic development prior to this 

financial crisis indicate that it can move into the higher income ranges under 

favorable circumstances. Planners may also use view policies in high-income 

countries as targets for development. Therefore the comparisons in Figure 11 

below are a mix of Asian countries of varying income levels. 

52



Figure 11 - Education Expenditure as % of GDP, International Comparisons 

Education Expenditure as % of GDP 

Per Cent of GDP 

7.0% 

6.0% 

5.0% 

4.0% 

3.0% 

2.0% 

1.0% 

0.0% 

1978 

1980 

1982 

1984 

1986 

1988 

1990 

1992 

1994 

1996 

Year 

Thailand Malaysia Indonesia Philippines 

2.2.2. Expenditure levels within the education sector 

The distribution of educational finances over levels within the system involves 

issues of adequacy, equity, and efficiency. That is, even if the aggregate amounts 

provided for the education system are adequate overall, there may be problems of 

maldistribution across levels and categories of expenditure within the system. This 

section examines these allocation patterns and identifies areas in need of attention. 

2.2.2.1. Financial Allocation Across Levels of Education 

a. The main levels identified within Thai education are pre-primary (three years of 

pre-school, including kindergarten), primary (grades 1-6), lower secondary 

(grades 7-9), and upper secondary (grades 10-2), and tertiary or higher education. 

Compulsory education includes the primary and lower secondary levels. Preprimary 

consists of a highly varied mix of programs that include kindergartens in 

primary schools and pre-school programs operated by communities, temples, and 

other public and private organizations. Upper secondary includes both vocational 

and general education schools and programs, and falls under a separate 

administrative structure from the primary levels. These aggregate expenditures 

across levels of education include subsidies to private schools as well. The totals 

for the 1998 budget are shown in Table 4 below. 

53



Table 4 - Education expenditure by level, 1998 

Total 

(Million Baht) 

Per Cent of 

Budget 

Per Cent of 

Enrollment* 

LEVEL 

Primary and Pre-Primary 89,113.1 44.2% 60.6% 

Secondary 50,311.6 24.9% 28.6% 

Academic 34,261.3 17.0% 40.3% 

Vocational 14,559.6 7.2% 4.8% 

Other 1,490.7 0.7% 

Higher Education 33,986.1 16.8% 10.8% 

University 32,159.8 15.9% 8.1% 

Non-Degree 227.7 0.1% 2.7% 

Other 1,598.5 0.8% 

Services not defined y Level 2,940.9 1.5% 

Ed. Affairs not elsewhere classified 20,633.6 10.2% 

Misc. 4,722.3 2.3% 

TOTAL 201,707.6 

*Enrollment from most recent year available, 1996-97 (OECD Project Report) 12 

b. The allocation of financial resources across levels shown in Table 4 suggests a 

discrepancy between the plans and priorities of the Government and the actual 

budget decisions. This is suggested by the fairly large differences between the 

per cent of the budget allocated to each level and their enrollments. Preprimary 

and primary education represent almost two-thirds of the enrollments, 

but receive less than half of the allocated budget. Similarly, general academic 

secondary education’s share of the budget is less than half the size of its share 

of the overall enrollment. By contrast, the university level receives a 

proportion of the budget almost double its share of enrollment. Of course these 

differences can be accounted for in part by the different unit costs typically 

associated with education at the various levels. University education is 

generally assumed to be more expensive than lower levels, and vocational 

more expensive per head than academic secondary education. This same 

pattern is found in the per pupil estimates by level shown in Table 5 below. 

These differences are even larger in some comparisons than the overall budget 

amounts. The unit cost for baccalaureate level education for example is almost 

six times that for secondary education. Another unusual ratio is that for 

primary education, over 10 per cent higher than for secondary education, a 

reversal of the typical pattern. By comparison, secondary education costs per 

pupil in Malaysia run about 1.6 times those for primary (Maaris and Kuslan, 

1997). 

12 The enrollment data from the OECD Project Report include approximately 2.7 million students not 

allocated by level, which are not included in Table 4 since it was not possible to ascertain an appropriate 

placement for them. 

54



Table 5 - Per Pupil Recurrent Expenditure by Level 

Education Level Cost/head 

Pre-primary 7,024 

Primary 9,057 

Secondary 8,086 

Higher Education 

Diploma 29,752 

BA Degree 47,152 

Source: ONEC Finance Study, 1997 

c. These ratios are quite different from what is found in developed countries. In 

Table 6 below, the ratios for selected developed countries shows a ratio of higher 

education to secondary education of no more than 3:1. In Malaysia, a comparable 

country in terms of income and development, the ratio of higher education to 

secondary education expenditures per head was approximately 2.5 to 1 for 1995. 

Table 6 - Ratio of higher-to-secondary-education expenditures per pupil, 

OECD countries, 1997 

Annual Expend/Student Ratio Higher 

Primary Secondary Higher to Secondary 

Australia 2,950 4,760 9,710 2.04 

Japan 4,110 4,580 8,880 1.94 

Korea 1,890 2,170 4,560 2.10 

New Zealand 2,570 4,290 8,020 1.87 

United Kingdom 3,360 4,430 7,600 1.72 

United States 5,300 6,680 15,510 2.32 

Mean 3,310 4,340 7,740 1.78 

Source: OECD Education at a Glance-OECD Indicators, 1997 

These large differences in allocation shares across levels represents a divergence 

between the stated policy goals, such as developing basic education, and 

increasing the quality and size of secondary education, versus the actual budget 

decisions. They also represent potentially large inefficiencies in the use of 

educational resources. 

d. These inefficiencies can be the result of different rates of return to the society 

for investment in the different levels and kinds of education. Studies of private 

versus social rates of return generally show that the society captures a large 

proportion of the return for investment in basic education, while the individual 

tends to capture much more of the benefits of higher education. Therefore the 

levels of subsidy to the different levels are typically scaled to reflect this 

relationship: high levels of government subsidy to basic education, shifting to 

more private expenditure for university levels. The ratios of expenditures in the 

developed countries reflect this reasoning, since they include only government 

expenditure, not the relatively larger proportion of private expenditure. A similar 

55



argument, though with somewhat less empirical support, applies to the returns for 

investment in vocational versus academic secondary education. 

e. The widely varying rates of expenditure across levels have equity implications 

as well. If these variations in support could be argued to help reduce some other 

inequity in educational opportunity, a case could be made for their continuation or 

perhaps even expansion. However just the opposite seems to be the case. The 

primary beneficiaries of the high levels of subsidy to higher education appear to 

be the higher income students and households. University students in general 

come disproportionately from the higher socio-economic levels of society. This 

generalization does appear to apply to Thailand. Substantially higher incomes 

characterize the students in baccalaureate study compared to the other levels of 

education according to the data reported in Table 7 below. 

Table 7 - Education expenditure and family income by level 

Expenditure Per head by Level and Type of Institutions 

Avg. Parent 

Current Exp. Capital Exp. 

Public Academic Income Tuition per head per head 

Primary 82,500 4,962 1,957 

Secondary Lower 121,932 358 5,933 3,173 

Upper 141,948 849 8,919 3,643 

Vocational 127,992 1,304 7,934 7,788 

Diploma Rajamongkol Institute 125,496 1,650 11,082 8,925 

Teacher College 128,004 1,884 12,943 14,870 

Baccalauriate Rajamongkol Institute 147,480 3,183 13,567 9,745 

Teachers College (2 yr) 140,604 1,964 5,319 8,571 

Teachers College (4 yr) 133,904 1,639 10,592 7,657 

Closed University 140,244 1,641 31,443 30,888 

Open University 89,352 1,130 3,943 2,586 

Private Academic Primary 215,532 1,389 3,892 4,821 

Lower Secondary 252,792 2,238 4,613 4,751 

Upper Secondary 288,164 2,943 5,993 5,817 

Private University 193,860 8,829 5,648 4,222 

Source: ONEC, School Finance Study, 1992 

f. The primary school income figures in Table 7 are considered here to be the 

most representative values for the society, since primary school attendance is over 

90 per cent. The average incomes for the Baccalaureate level (excluding the Open 

University) are over 70% higher than for primary and 15% higher than lower 

secondary, while comparable to upper secondary. The spread is even greater for 

private universities and the closed (selective) public universities. The 

comparability between family incomes in upper secondary and higher education is 

to be expected, since attendance in upper secondary is selective and has relatively 

low participation rates (approximately 47%). Overall, the indication is clear that 

the high levels of support for higher education cannot be justified on equity 

grounds, except perhaps for those students attending the Open University. 

56



2.2.2.2. Expenditure Across Budget Categories 

a. Efficient use of resources requires a balance of allocation among the various 

uses and categories for the objects of expenditure. Therefore this review includes 

attention to the patterns in resource use over the recent past. The first part of this 

review examines the patterns of expenditure over the main categories of expense 

which are standard in the Government budget: salaries, temporary wages, 

remuneration (for non-salary expenses), utilities, subsidies (transfers to other 

levels or organizations), capital expenses, and other. The proportion of these 

amounts by level are shown in Figure 12 below. 

Figure 12 - Per cent of budget by education level and category of expenditure 

Percent of Budget by Education Level and Categories of Expenditure, 1998 

Per Cent of Budget 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Pre-prim/Prim 

Secondary 

Academic 

Vocational 

Other 

Higher Educ. 

University 

Non-Degree 

Other 

Not def. by Level 

Not Classified 

Misc. 

TOTAL 

Salary Temp. Wages Remun. Utilities Capital Subsidies Other 

b. To show the actual scale of expenditure, the actual amounts and percentages 

allocated to these expenses for the 1998 budget are shown in Table 8 below. 

c. The comparison of amounts in Table 8 shows substantial variation in the mix of 

resources used in the different levels and components of the educational system. 

Since education is a labor-intensive service, it is expected that the proportion of 

expenditure on salary and wages will be large. What is not expected is that the 

variation among the levels and components of the system would be as large as 

those seen here. Across almost all of primary and secondary components the 

proportion of temporary wages is similar. So the sizes of the differences are 

accounted for by permanent salaries. Since salary rates for the primary and perprimary 

grades are lower in general than those for secondary, the larger proportion 

of expense to salary for the lower levels must be accounted for by higher 

proportion of staff. The overall student-teacher ratios for the public schools bears 

this out, with an average of 23.3 students per teacher for the primary level, 

57



compared to 36.3 at the lower secondary and 35.9 at the upper secondary level. 

This represents an over 50 per cent higher staffing ratio for the lower level, which 

easily accounts for the budget differences. 

Table 8 - Budget allocation by level and expenditure type, 1998 (million Baht) 

Level Total Salary Emp Wage Remun. Utilities Capital Subsides Other 

Pre-prim/Prim 89,113.1 72.5% 0.5% 2.4% 0.5% 3.7% 20.2% 0.1% 

Secondary 50,311.6 51.5% 0.6% 11.3% 1.0% 22.0% 13.0% 0.6% 

Academic 34,261.3 59.4% 0.6% 5.8% 0.7% 16.4% 16.7% 0.4% 

Vocational 14,559.6 34.0% 0.7% 24.35% 1.7% 35.2% 3.1% 1.1% 

Other 1,490.7 38.7% 0.3% 11.0% 1.0% 21.4% 26.2% 1.4% 

Higher Educ. 33,986.1 34.9% 0.7% 7.1% 1.8% 36.6% 18.1% 0.8% 

University 32,159.8 36.7% 0.7% 7.4% 1.9% 38.3% 14.1% 0.9% 

Non-Degree 227.7 25.5% 2.2% 8.8% 0.2% 50.2% 13.2% 0.0% 

Other 1,598.5 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 

No def. By 2,940.9 30.9% 8.5% 35.4% 1.6% 15.9% 1.3% 6.5% 

Level 

Not Classified 20,633.6 0.0% 0.0% 0.0% 0.0% 3.5% 6.8% 89.7% 

Misc. 4,722.3 39.7% 0.6% 17.7% 2.8% 14.7% 19.6% 5.0% 

TOTAL 201,707.6 52.1% 0.6% 6.0% 0.9% 14.2% 16.4% 9.7% 

d. By contrast, the proportion of salary expense for higher education appears to be 

lower than would be expected in comparison to other higher education systems. 

Some of this situation appears to be a consequence of the mix of faculty by rank 

and qualification in the higher education level. MUA figures show only 11 per 

cent of public university staff with Ph.D. degrees and over 50 per cent with BA 

degree or lower. Similarly, the distribution by rank shows 50 per cent of staff at 

the rank of lecturer and less than 2 per cent at the rank of professor. 

e. The proportion of capital expenditure in the higher education level is also above 

what might be expected. Figures in the 10-20 per cent range would be more 

typical of higher education systems, except those that were undergoing periods of 

rapid expansion. This has certainly been true of the system in Thailand. 

Enrollments in higher education increased from 491,956 in 1991 to over 1.1 

million in 1997. Better than doubling enrollment in a seven-year period would 

require substantial capital investment. This is apparently ongoing. But this still 

does not account for the high levels completely. For comparison, a similar, though 

somewhat slower expansion was occurring in Malaysia, with the increase from 

1991 to 1996 from approximately 600,000 to 1,000,000 university students. Yet 

the capital expenditure for Malaysian higher education in 1995 was less than 10 

per cent. 

2.2.2.3. Public versus private schools 

a. There are marked differences between the expenditures in public versus private 

schools as well. These differences show that the available financial resources for 

the private schools in general are below those for the public schools in the basic 

education levels. (See Table 9 below and Table 7 above.) The total expenditure 

58



levels for the public and private basic education levels are roughly comparable, 

with the largest difference between the primary levels, with the private level being 

approximately 26 per cent above the private, and the Upper secondary private 

about six per cent below the public. However, the total expenditure levels do not 

give a complete picture. The recurrent expenditure levels in the public schools are 

considerably above the private schools, with the reverse being true in the capital 

expense category. The capital expense levels are roughly equal to the recurrent 

expense in the private schools, an unusually high proportion for basic education. 

This is most likely a consequence of lower salary levels in the private schools, 

greater expense for development and expansion, and possibly higher levels of 

expenditure on equipment and other capital goods. 

b. The expenditure figures for the private schools are difficult to interpret due to 

the variation in the reputation and overall expenditure levels in this sector. Those 

familiar with the private schools report large variation in the academic quality, 

reputation, and resources available. Some elite private schools have very high perpupil 

expenditure levels, while other private schools have resources well below 

the mean for public schools. The evidence on pupil/teacher ratios in the public 

schools suggests that the variations among the public schools can be substantial as 

well. Therefore the relatively close comparisons between public and private 

schools shown here may be misleading in terms of equity and quality 

considerations. A more comprehensive analysis of expenditure per head, based on 

data from individual schools, would allow more precise identification of the areas 

where low quality and inequities may be serious problems. Such data were not 

available for this review. 

Table 9 - Expenditure per head by level and school type 

Current Exp. Capital Exp. Total Exp. 

Public Academic per head per head per head 

Primary 4,962 1,957 6,919 

Secondary: Lower 5,933 3,173 9,106 

Upper 8,919 3,643 12,562 

Vocational 7,934 7,788 15,722 

Diploma 

Rajamongkol Institute 11,082 8,925 20,007 

Teacher College 12,943 14,870 27,813 

Baccalauriate 

Rajamongkol Institute 13,567 9,745 23,312 

Teachers College (2 yr) 5,319 8,571 13,890 

Teachers College (4 yr) 10,592 7,657 18,249 

Closed University 31,443 30,888 62,331 

Open University 3,943 2,586 6,529 

Private Academic 

Primary 3,892 4,821 8,713 

Lower Secondary 4,613 4,751 9,364 

Upper Secondary 5,993 5,817 11,810 

Private University 5,648 4,222 9,870 

Source: ONEC, School Finance Study, 1992 

59



c. The differences between public and private sectors are much more pronounced 

in higher education. Expenditures per head in the closed (highly selective) 

universities is more than six times that in the private universities. In contrast with 

basic education, the level of capital expenditure in the private higher education 

sector is considerably lower than in the public. Only the Open Universities has 

lower expenditure levels for either recurrent or capital categories. Given the large 

enrollment, largely part-time nature of the Open Universities, this expenditure 

level is not surprising. What these data show clearly is a three-level higher 

education system. The closed universities operate with three to six times the 

resources levels of the rest of the sector, making them clearly separate in financial 

terms. The differences among the remaining institution types are less pronounced, 

but the remaining public institutions are still well above the private, making them 

the middle level in terms of resource endowment. The private university system is 

the low finance level, roughly on a par with private upper secondary expenditure 

levels. 

d. Higher education systems in most countries show wide differences in 

expenditures per head, so these differences in themselves are not necessarily a 

policy problem. However the relationship between the sources of the finances and 

the beneficiaries raises a question of equity. The data on the income levels of the 

families of students in these different institutions indicates that higher education in 

general serves families with considerably higher income than the population as a 

whole (see Table 7 above). There is a fairly consistent pattern of higher levels of 

education serving higher income populations, with students from the highest 

income segment of the population attending private higher education and upper 

secondary levels. This suggests that the higher education system is less open to 

lower income students, in part no doubt because they received lower quality basic 

education and do not qualify for admission, and in part because they cannot afford 

to attend. To the extent that this is true, the higher education system is less of a 

mechanism to promote access to education and educational opportunity, and more 

a mechanism to reinforce the existing patterns of wealth and status in the society. 

This latter outcome would be quite inconsistent with overall policy goals and 

principles of equity. 

2.2.3. Local Revenue and Expenditure 

2.2.3.1.. Local revenue sources 

a. One of the stated goals of current reform initiatives and responses to the 

financial crisis is to stimulate greater support for educational from local resources. 

It is therefore necessary to examine the degree to which local resources now 

support educational programs and the local capacity to expand that support. In this 

context, the term “local resources” can include both public and private sources. 

The contributions of private sources are reviewed in the following section. 

Attention is given here to the local government contribution to educational 

financing. 

b. Support for public (government) schools currently comes from multiple 

sources. The largest proportion is from the Government budget. Overall, ONEC 

60



estimates that 83 per cent of the total budget for schools is from the central 

Government, with approximately one percent from local sources, approximately 

15 percent from private funds, and the remainder from foreign or international 

donor funds. 13 The proportions for municipal schools (BMA and the other 

municipalities) are different, since these schools receive substantial funding from 

municipal sources. For these schools, approximately 24 per cent of educational 

revenues are from local taxation and an additional one per cent from 

miscellaneous sources, leaving 75 per cent support from the central Government. 

Bangkok (BMA) is by far the largest municipality, operating 430 schools under its 

jurisdiction, with an estimated 1998 education budget of 1.8 billion Baht (BMA 

Education Department figures). These municipalities also receive subsidies 

directly from the Central government, with the BMA anticipating approximately 

7.7 billion Baht in subsidies for 1998. 

c. The revenues from local tax sources are generated from several sources. 

Municipalities may levy an ad valorem property tax on buildings, vehicle license 

fees, fees for certain economic activities (such as animal slaughtering, sign boards, 

liquor sales, etc.), and a surcharge (1 per cent) of the VAT tax collected by the 

central Government. These can be substantial sources of revenue for the 

municipalities, and do support education. However the municipal schools enroll 

only about six per cent of the total for Thai schools. So the role of local revenue 

for the overall education system remains quite small. The revenue-raising 

mechanisms and capacities of the municipalities do provide, however, a 

potentially useful model for how other local revenues could be generated for the 

support or education in some more developed areas. 

2.3. Private educational expenditure 

a. Government expenditure represents only part of the total investment in 

education. This is recognized in current policy and reform proposals, which 

advocate measures to increase the proportion of educational expenditure coming 

from private sources. Therefore this analysis recognizes the importance of this 

part of the educational finance picture and has examined the available evidence on 

current private expenditures. The examination includes estimates of overall 

expenditures from households and other non-Government sources and the 

implications of these patterns for equity in educational opportunity and potential 

for revenue increases. 

b. These estimates are based on examining the flow of private resources from two 

perspectives: that of the households and families that supply the funds, and that of 

the schools that receive the funds. The estimates of household outlays are based 

on two sources of data: a survey of approximately 5000 households conducted by 

the ONEC in 1997, and the results of the 1996 National Social Survey, employing 

a sample of approximately 25,000 households. The estimates of school revenues 

from private sources are based on a sample survey of over 600 schools conducted 

as part of this project. A description of the school survey is found in the Appendix 

3. 

13 Presentation by Dr. Nongram Setapanich, Sept. 12, 1998. 

61



2.3.1. Overall private expenditure on education 

The current evidence shows that the level of private (i.e., family and household) 

expenditures on education is quite high. The ONEC conducted two surveys in 

1997. One surveyed approximately 5000 households with children in school to 

assess their expenditure patterns for school-related purposes. The other surveyed a 

similar number of households with students in higher education. While these are 

only estimates, they do indicate that the overall cost of education to the country as 

a whole is being shared on a substantial basis by the private sector. 

2.3.1.1. Private Expenditure on Basic Education 

a. The results of the basic education survey (in Table 10 below) show that the 

estimated household outlay for education is near to and appears in several cases to 

exceed that from the Government budget, shown in Table 5 above. The household 

expenditure for public primary is approximately two-thirds of the Government 

cost per pupil, and the private outlay appears to exceed the Government cost for 

lower and upper secondary levels by a substantial amount. 

b. However, these comparisons of private expenditures with the budget amounts 

must be viewed with some caution, since the government figures do not present a 

complete picture of actual expenditures. The primary and pre-primary budget 

amount underestimates total government allocations, since it does not include all 

allocations from local government budgets (particularly BMA), since the full 

details of these allocations were not available. The secondary education figures 

are also only rough estimates, since the budget summaries combine allocations to 

lower and upper secondary programs. The estimation of secondary expenditure is 

further complicated by the operation of lower secondary programs by ONPEC, the 

allocation for which appears as a primary education expenditure. For 1997, 

ONPEC lower secondary enrollments were reported as 536,291, approximately 15 

per cent of the total. In addition, non-formal enrollment and expenditures are 

excluded due to the part-time enrollment of some students in non-formal 

programs. In addition, the private amounts are self-reported by the households, 

and could not be verified by independent accounting records. Therefore the 

private amounts could contain errors. Nonetheless, the basic conclusion indicated 

by these estimates does not depend on a high level of precision. The rough order 

of magnitude of these figures remains evidence of substantial private outlays. 

62



Table 10 - Estimates of household expenditure on education (ONEC survey, 1997) 

School Type Control 

Total Priv. 

Expenditure 

Tuition 

And Fees Indirect 

Est. Budget 

Expenditure 

Kindergarten Public 3,854 377 9.8% 3,489 90.5% 

Private 11,670 4,910 42.1% 6,760 57.9% 

Primary Public 6,349 526 8.3% 5,834 91.9% 9,213* 

Private 15,704 4,500 28.7% 11,195 71.3% 

Low. Secondary Public 10,838 1,176 10.8% 9,657 89.1% 12,487** 

Private 17,368 4,323 24.9% 13,045 75.1% 

Upper Secondary Public 17,129 2,453 14.3% 14,684 85.7% 

Private 24,977 6,915 27.7% 18,336 73.4% 

Voc. Educ. Public 15,452 3,035 19.6% 12,412 80.3% 14,320*** 

Private 28,385 13,320 46.9% 15,276 53.8% 

Total Public 8,804 1,008 11.4% 7,803 88.6% 

Private 18,908 6,723 35.6% 12,348 65.3% 

Notes: 

* Combined Pre-Primary and Primary, 1998 

** Combined Lower and Upper General Secondary, 1998 

*** Includes OPEC and DOVE enrollments 

c. There is also significant variation in the level of private expenditure across 

levels and types of schools, as shown in Figure 13 below. As would be expected, 

the family expenditures for private schools are substantially higher than the public 

schools. As Figure 13 shows, most of the difference in expenditure is accounted 

for by higher tuition in the private schools. However, the indirect expenses (meals, 

transportation, supplies, etc.) are markedly higher in the private schools, 

especially at the primary level where they are almost double that for the public 

schools. Some of these higher indirect costs may reflect higher charges by the 

private schools for some materials, meals, or other services. The differences also 

include higher transportation costs that reflect parents’ choices of distant schools, 

and possibly parent preferences for higher priced clothing, supplies etc. 

d. The large proportion of these indirect expenses and their discretionary nature 

has policy implications. It appears at least plausible that increases in direct 

charges (tuition and fees) could be paid by some families without substantial 

increases in the total cost of schooling. This would be possible if they were 

willing to substitute lower cost choices for discretionary expenses in order to 

offset and increase in direct charges. The equity implications of these possible 

policy and spending shifts are discussed in Section 2.4, below. 

63



Figure 13 - Tuition and indirect expenditure on schooling 

by type of school (1997 survey) 

Tuition and Indirect Private Expenditure on Schooling by Type of School 

1997 Survey 

30,000 

Expenditure (Baht) 

25,000 

20,000 

15,000 

10,000 

5,000 

Indirect 

Tuition 

- 

Pub. Pre-Prim. 

Priv. Pre-Prim. 

Pub. Prim. 

Priv. Prim. 

Pub. L.S. 

Priv. L.S. 

Pub. U.S. 

Priv. U.S. 

Pub. V.E. 

Priv. V.E. 

Pub.Tot. 

Priv.Tot. 

School Type 

e. Before a treatment of the policy implications of these expenditure patterns, it is 

necessary to review the differences between the private expenditure estimates 

from the ONEC survey and those from the National Social Survey (NSS). The 

NSS 1996 survey of a sample of all households shows an average monthly 

education-related expenditure of 450 Baht. Annualized to 5400 Baht, this 

compares favorably to the results of the ONEC survey, since the NSS sample 

included households with no children in school. The 1996 average is a 14 per cent 

increase from the 396 Baht monthly figure reported for 1994. The 450 Baht/month 

represents approximately 5 percent of total expenditure reported. There was 

considerable variation among areas of Thailand, from a high of 992 Baht (6.3% of 

expenditures) in BMA, to a low of 333 Baht (4% of Expenditures) in the 

Northeast Region. These variations track the overall levels of income in the 

regions. 

f. Since the NSS is based on a representative sample of the population, it can be 

used as the basis for an estimate of the total household-level expenditure on 

education. The average household size reported in the NSS for 1996 is 3.6 

persons, yielding a per capita annual expenditure on education of 1500 Baht. 

Since the 1990 population of Thailand was 54.5 million, the 1996 population 

could be estimated at 60 million, yielding a private education expenditure of 

approximately 90,000 Million Baht, compared to the total Royal Thai Government 

education budget of a little over 200,000 Million Baht (preliminary estimate). 

Thus for the households with children in school, the expenditure on education is a 

major proportion of the total cost, often exceeding the government-funded portion. 

And for the nation as a whole, the private expenditure adds nearly half as much as 

the direct government allocation. It is even quite likely that these overall estimates 

64



understate the total cost to households, which can include substantial opportunity 

costs resulting from transporting children and helping with schoolwork. These 

estimates also ignore the value of contributions in kind to the schools, which can 

be substantial as well. These are discussed in the section dealing with private 

support to schools(Section 2.3). 

2.3.1.2. Private Higher Education Expenditure 

a. The relative levels of household expenditure on higher education are quite 

similar to those for basic education. That is, the amounts from private sources are 

comparable to the government allocations. The average amounts reported for 

private expenditure are show by type of institution in Table 11 below. 

Table 11 - Average private expenditure on higher education by type of institution 

(ONEC survey) 

Average 

Number of 

Type of Institution Expenses Tuition Total Cost Households 

Min. of Univ. Affairs 27,330 19,171 46,657 2793 

Rajabhat 19,634 8,774 28,654 1420 

RIT 26,017 16,134 42,085 416 

Private 28,352 31,427 58,413 23 

Total 24,869 15,495 40,608 4652 

These amounts are comparable to, and to some degree above the per head 

expenditure levels reported by the ONEC for 1994 in Table 9 above. Since the 

overall expenditure on higher education has increased substantially since 1994, 

current estimates for the government share are likely to be considerably higher. 

The only area in which the government share appears to be substantially higher 

than the private expenditure levels is for the closed universities. The per head 

government expenditure of over 60,000 Baht reflects a very high level of capital 

investment; the recurrent cost is closer to the private levels reported in Table 11. 

Full-time equivalent enrollment data for each type of higher educational 

institution were not available for this analysis. Since the reported enrollments in 

higher education include full- and part- time students, accurate per head 

calculations could not be made with current budget data. 

65



Figure 14 - Private higher education expenditure by type of institution 

Private Expenditure on Higher Education by Type of Institution 

1997 Survey 

90,000 

80,000 

Average Expenditure 

70,000 

60,000 

50,000 

40,000 

30,000 

20,000 

Tot. Exp. 

Tuit. & Fees 

10,000 

0 

MUA Rajabhat RIT Private Total 

Institution 

b. The proportion of tuition to total private expenditure for higher education is 

shown in Figure 14 above. The tuition proportion is generally higher than that for 

basic education expenditure, which would be expected. It is also noteworthy that 

the amount of non-tuition expenses increases with the tuition level. To the degree 

that these expenses are more discretionary than tuition, this pattern suggests that 

those who can afford higher tuition have preferences for greater outlays on other 

expenses as well. This has similar equity implications as the related observation 

for basic education above. 

2.3.2. Private Expenditure and Equity 

a. The high level of private expenditure on education has important implication 

for the pursuit of the Government’s equity goals. Some implications arise out of 

the equity impacts of current funding and expenditure patterns. In general these 

patterns indicate that the private burden of educational financing falls more 

heavily on lower income households and lower income areas of the country. 

Therefore it appears that the current system has elements that could be improved 

in terms of equity of the financial burden. Increasing the role of private 

expenditure in the overall financing of education should therefore be done in ways 

that reduce or eliminate as many as possible of the inequitable elements that 

appear in the current system. 

b. The private costs of education occupy a much larger proportion of household 

income for the poor households than for the richer ones, as would be expected. A 

comparison of expenses to income for the basic education survey is shown in 

Figure 15 below. For the three highest income groups the expenditure for basic 

education is approximately 10 per cent or less of total family income, even for 

private schooling. For the lowest income groups the proportion rises to as much as 

70 per cent for the total expense of private schooling. As would be expected, the 

burden of expenses for private education exceed that for public by substantial 

66



proportions, even at the low percentages for the high income groups. But it is 

important to note that the expenses for the highly subsidized public schools 

impose a substantial burden on the lowest income group; for the lowest group, the 

cost of public schooling exceeds 20 per cent of total income. 

Figure 15 - Expenses as a per cent of family income by income groups 

Expenses as a Per Cent of Family Income by Income Groups 

Public v. Private Schools 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Less than 3000-6000 

3000 Baht Baht 

6001- 

10,000 

Baht 

10,001- 

20,000 

Baht 

20,001- 

30,000 

Baht 

Over 

30,000 

Baht 

Estimated Family Income (Monthly) 

Total Exp-Public Total Exp-Private Tuition&Fees-Public Tuition&Fees-Private 

Figure 16 - Expenses as a per cent of income by occupation of parent 

Expenses as Per Cent of Income by Occupation of Parent 

Public v. Private Schools 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Farmer & 

Related 

Commercial 

(selfemployed) 

Employee of 

Private Firm 

Govt./State 

Employee 

Free Lance 

Other 

Occupation 

Total Exp-Public Total Exp-Private Tuition&Fees-Public Tuition&Fees-Private 

67



c. A similar pattern of disproportionate expenditure burden is found when the 

impact is examined by the family’s main occupation. The comparison of expenses 

as a proportion of income for varying occupations is shown in Figure 16 below. 

The discrepancy between the highest and lowest income groups by occupation is 

not as large as in the previous comparison (Figure 15). But the burden on the 

agricultural families, and to a lesser degree those in the informal sector, is still 

significant. Even the cost of public education for agricultural families requires 

almost four times the percentage of income compared to government and state 

employees. 

d. A similar pattern of income-related burden is found in the results of the higher 

education survey. The respondents to that survey were asked to indicate if their 

income were sufficient to support higher education for their children. The answers 

to that question by income group are shown in Figure 17 below. The pattern there 

is quite striking. Slightly over 70 per cent of the highest income families reported 

that their income was sufficient to support higher education for their children. For 

the lowest income group, the comparable number was less than 5 per cent. Only in 

the highest income group did more than half of the families indicate that they 

thought they had sufficient income for these purposes. Of course whether the 

income is sufficient requires a subjective judgment, and can vary a great deal from 

one family to another. And given the high levels of subsidy to higher education 

generally, this reporting of “insufficient income” in the upper income groups is 

suspect. But the equity implications of the responses of the lowest income groups 

do appear to be meaningful and should be taken into account in equity policy 

formulation. 

Figure 17 - Per cent of families with sufficient income to support higher education 

Per Cent of Families with Sufficient Income to Support Higher 

Education 

Percent of Respondents 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

< 3,000 3,000- 

6,000 

6,001- 

10,000 

10,001- 

20,000 

20,001- 

30,000 

over 

30,000 

Family Income (Baht per month) 

e. Overall these survey results clearly indicate that even the poorest families are 

willing to make major sacrifices to support their children’s education. The results 

also indicate that the method of financing that relies on heavy private sharing of 

68



expenses leads to a less equitable system. This is an obvious characteristic of 

educational financing that requires effective equalizing policies to overcome. 

Approaches to such policies are described in the recommendations section. 

2.3.3 School level revenues: survey results 

a. To examine the flow of private support to education, a sample of 625 schools 

was chose to receive a survey. The school head or principal was asked to describe 

the amounts and types of support received from all sources, along with descriptive 

data about the school (description of the survey is found in the Appendix 3). The 

overall results of this survey are shown in Table 12 below. The results show that 

on average the schools receive significant amounts of direct support from the socalled 

private sector. The amounts shown in Table 12 include the reported tuition 

received by the school, private donations, and estimates of the value of 

contributions in kind. As would be expected, the private schools, particularly the 

owner-operated (proprietary) ones, receive substantial support. However, the 

overall averages are slightly misleading, due to the large variations in the amounts 

of donations and in-kind support. A few schools received very large donations or 

in-kind gifts, such as a building or expensive equipment. However, even if these 

very large donations excluded, the average support for the schools does not 

change appreciably. 

Table 12 - Overall support from private sources by type of school 

School Type 

Average 

Support 

Average Support 

plus Tuition 

Number 

of Schools 

ONPEC 210 212 523 

Municipal 330 358 24 

OPEC 619 3,441 6 

Private-Owner 1,152 4,133 29 

DGE 65 512 56 

DVE 37 1,206 14 

Total 244 468 652 

b. The wealth of the province in which the schools were located did not have any 

apparent relationship with the level of private support reported by the schools. 

There were schools from seven provinces sampled for the survey, ranging from 

the wealthiest (BMA) to two of the poorest. The average support level received by 

schools in BMA was the third lowest among the seven, and the province with the 

highest average was in the next-to-lowest wealth quartile. 

c. In order to assess the likelihood of increasing private sector support, the school 

survey included questions on that subject. The school head was asked to estimate 

the percentage increase he or she believed possible from several sources of private 

support. The overall response to these questions was quite pessimistic. Out of 625 

respondents, the largest number of answers over zero to any item was 89. Due to 

these small number of responses computing an average would not be meaningful. 

Instead the table below (Table 13) reports the number or respondents who 

estimated 10 per cent or more increase possible for their school. To the extent that 

69



the perceptions of these school heads are accurate, the prospects for large or 

immediate increases in private support directly to schools appear to be slim. In 

some cases, of course, school heads were very optimistic, predicting as much as a 

200 per cent increase from sources. But these answers were very rare and do not 

indicate widespread expectation of significant increases. 

Table 13 - School head's estimates of possible increase in private support 

Number estimating 10% 

Source of Support 

or more increase possible* 

Possible Increase in Support from Individual Parents (%) 77 

Possible Increase in Support from Festivals and Events (%) 46 

Possible Increase in Local Government Support (%) 35 

Possible Increase in Support from Temple or Monastery (%) 27 

Possible Increase of PTO Support (%) 25 

Possible Increase in Support from Patron or Sponsor (%) 25 

Possible Increase in Local Business Support (%) 20 

Possible Increase in Alumni Support (%) 18 

Possible Increase in School Foundation Support (%) 14 

Possible Increase in Support from Other Sources (%) 10 

Possible Increase in Support from NGO's (%) 9 

Possible Increase in Earnings from Sales/Rents (%) 8 

Possible Increase in Support from International Donors 3 

* Number out of 625 possible respondents 

d. The overall record of private support for the schools does, however, reveal 

some grounds for optimism. Clearly some schools are extremely successful in 

mobilizing resources from the private sector. In site visits to several schools the 

project team found school heads had developed very creative and successful 

strategies for obtaining additional resources. These administrators demonstrate 

that such tactics can be successful, even if they are not yet widely practiced 

throughout the school system. And some schools are in such impoverished 

environments that even the most creative and energetic administrator may be 

unsuccessful in mobilizing significant funds. Therefore if the Government wishes 

to pursue a strategy of increasing private sector support, at least two strategies are 

needed. One would provide training, incentives, and support for school 

administrators to mobilize new support. The other would be to provide substantial 

government support to increase the resources available to those schools where 

private funding cannot be increased. Some approaches to these strategies are 

discussed in the recommendations section. 

2.4. Issues of Equity 

a. Providing equitable access to quality education is a basic policy goal of the 

Government (discussed in detail at above:section 2.13). This section assesses 

evidence of how well the current finance system promotes those goals. The 

approach combines attention to two basic views of the meaning of equity: 

fairness based on equal treatment and fairness based on equalization of 

70



opportunity to compensate for disadvantages. The assessment includes 

consideration of resource allocations across levels of education and across 

geographical divisions. It also examines commonly used indicators of access and, 

where available, of the performance of the educational system. This approach 

does not depend on some comprehensive or absolute definition of what is an 

equitable system. Instead, it provides indications and insights into inequities in the 

financial arrangements for education, and can point directions for policy 

initiatives and reforms to move toward greater equity. 

b. One important source of inequity in educational opportunity is the low social or 

economic status and resources of families. The relationship between family or 

private resources and school resources was shown in the section on private 

support above. This preceding part of the analysis shows that substantial 

variations exist in the provision of private resources to education, and that these 

variations are closely related to family and province or regional resources. That is, 

the availability of private financial resources is demonstrably lower in 

disadvantaged areas or among economically disadvantaged families. This general 

pattern is relieved in important instances by charity schools or other sources of 

philanthropy that greatly increase the resources available for some otherwise 

disadvantaged children. But it appears that these positive examples are too few in 

number to balance the wide variations in family and community resources. 

c. Educational finance policies are not effective tools for directly equalizing 

differences in family, community, or provincial wealth. But these policies can be 

effective in improving the equity in the components of provision of education over 

which the Government has direct control: allocations of resources to schools. 

That is, it is common in educational systems for inequities to arise as a result of 

resource allocation practices and policies of the Government. Other inequities 

have their roots in the varying wealth or availability of economic resources in 

different areas of the country, such as urban vs. rural. And others are a result of 

the social and economic circumstances of families and households. Educational 

finance policies and practices are not effective at direct reduction of inequities 

resulting from these latter two sources. Therefore this analysis concentrates on the 

resource allocation aspects of equity in educational opportunity. 

d. The two aspects of resource allocation to be examined: budget allocations and 

allocation of teachers. Allocations of these two kinds of resources are linked in 

important ways, but are not the result of the same Government policies or decision 

processes. Budget allocations control the flows of funds to the parts of the system, 

but teacher allocations are not a direct part of the budget decision making process. 

The teaching force available in any school, province, or region is the result of 

many past budget decisions, and the transfers of teachers among schools 

according to personnel policies and decisions at various levels (section 2.1.4.6 

above). Therefore the examination of equity in terms of financial and teacher 

allocations are treated separately. 

71



2.4.1. Financial equity 

Overall, there do not appear to be gross or systematic inequities in the allocation 

of educational resources to basic education across provinces or regions. With the 

exception of the specific instances discussed below, the existing financial policies 

appear to be adequate in providing roughly equal budget and teacher resources 

across provinces and regions. Where there are important differences in the 

allocation of these resources, however, some of the differences serve to aggravate 

rather than ameliorate the existing economic disparities. That is, there are notable 

instances where budget and teacher allocations are lower to regions or provinces 

with lower income or wealth levels. And overall, the finance system does not 

appear to be effective in equalizing or compensating for these provincial or 

regional disparities. 

2.4.1.1. Within basic education 

a. The budget allocation process, based at it is on enrollment-linked formulas, 

should produce roughly equal per student allocations by province. Evidence of 

inequity in these basic allocations would be indicated by an allocation that 

deviated substantially from that predicted by enrollment. The primary budget 

allocation relative to enrollment by province shows (Figure 18 below) that with 

few exceptions the allocations track with enrollment. In Figure 18 each point on 

the plot represents one province’s primary education enrollment and budget 

allocation for 1997 (the latest year for which complete data were available). The 

line represents a statistical prediction of what the budget allocation should be 

based on enrollment (linear regression). The fact that almost all of the province 

points fall near or on the line shows that the basic enrollment driven allocations 

produce roughly equal per-pupil allocations across provinces. Of course, 

considerable variation within provinces could exists, but could not be analyzed 

due to lack of school or district-level budget allocation data. 

b. There are some provinces that show departure from the pattern of roughly equal 

per pupil primary allocations. These are shown in Figure 18 by a number next to 

the plotted point for that province. The names and regional location of those 

provinces are shown in Table 14 immediately following Figure 18. It is not clear 

from the available budget or staffing data why these provinces have disparate 

funding levels. As the table shows, the staffing levels at the primary level do not 

account for the disparities, nor did an examination of other budget allocations, 

such as for capital allocation or temporary wages, explain the variations shown. 

Since these disparities are not large or systematically related to the location or 

economic level of the provinces, they are not immediate policy issues to be treated 

further here. 

72



Figure 18 - Primary budget allocation relative to enrollment by province 

Predicted and Actual Primary Expenditures by Province 

5,000,000,000 

Primary Allocation (1997) 

4,500,000,000 

4,000,000,000 

3,500,000,000 

3,000,000,000 

2,500,000,000 

2,000,000,000 

1,500,000,000 

1,000,000,000 

500,000,000 

- 

30 

15 

34 

7 

4 

0 50,000 100,000 150,000 200,000 250,000 300,000 

12 

Number of Primary Students 

63 

Table 14 - Data for provinces with disparate primary financing 14 

Province 

Code Province Region 

Primary 

Stud/Tchr 

4 Samut Prakan Central 34.8 

7 Narithawat Southern 43.5 

12 Nakhonsithammarat Southern 25.2 

15 Phuket Southern 30.7 

30 Sing Buri Central 17.9 

34 Kamphaengphet Northern 21.1 

63 Nakhonratchasima Northeastern 23.5 

2.4.1.2. Equity and resource allocation by region and wealth of provinces 

a. Another aspect of equity in resources allocation concerns the degree to which 

the results compensate for economic or other disadvantages in the society. A 

roughly equal allocation pattern may be considered one form of equity, but it does 

not have any equalizing impact relative to economic disparities. To examine the 

possible equalizing effects of the resource allocation process, the distributions by 

14 The English spelling of province names is not consistent among various publications and Government 

sources consulted in this project. For consistency in this report, the spellings found in the Government 

publication Thailand in the 90’s are used throughout. 

73



regions and relative wealth of provinces were examined. One indicator of the 

degree to which resources compensate for economic disadvantage is the 

correlation of wealth measures with resource allocations. Positive correlation 

coefficients indicate that more resources are going to wealthier provinces, while 

negative values indicate an equalizing effect. In Table 15 below, the bivariate 

correlation coefficients of selected province resources with two measures of 

wealth: gross provincial product per capita and income per capita. 

Table 15 - Correlation of province resources with wealth 

Correlation Coefficient 

Province Amount GPP/capita Income/capita Number 

Gen. Sec. Expend./pupil 0.22 0.15 47[1] 

Higher Ed. Institution Expend. 0.24 * 0.31 ** 76 

Higher Ed. Total Expend. 0.24 * 0.31 ** 76 

Lower Ed. Exp. per pupil -0.33 ** -0.30 ** 76 

Sec. Ed. Exp. per pupil 0.03 -0.01 76 

Students/Teacher-Upper Sec. -0.06 -0.04 76 

Students/Teacher-Primary 0.38 ** 0.49 ** 76 

Upper Secondary Enrollment 0.25 * 0.31 ** 76 

* Correlation is significant at the 0.05 level (2-tailed). 

** Correlation is significant at the 0.01 level (2-tailed). 

Note [1] General Secondary Education budget data available for 47 provinces only. 

b. The correlation coefficients show a consistent pattern. All of the measures for 

lower or primary education resources show a relatively small equalizing 

distribution. Although the relationship of lower education expenditure per pupil to 

wealth is not a strong one, it is negative and statistically significant, showing 

higher expenditure levels in poorer provinces. Similarly, primary-level class sizes 

are positively related to wealth, indicating somewhat smaller classes in poorer 

provinces. None of the measures for secondary or higher education resources 

show evidence of an equalizing distribution. General secondary expenditure and 

overall secondary expenditure per pupil have wealth neutral distributions. 

However, higher education expenditure, upper secondary teacher allocations, and 

upper secondary enrollment (a proxy for expenditure), all show a positive 

correlation with wealth. These resources are distributed in ways that favor the 

wealthier provinces, though to a relatively small degree. 

c. A representation of the differences in the lower versus higher education 

distributions is shown in Figure 19 below. For this figure, the provinces were 

ranked according to gross provincial product per capita, and the ranking divided 

into quartiles (lowest 25 per cent of the ranking in the first group, and so forth) 15 . 

The average primary and higher education expenditure per capita is then 

computed for each quartile. The wealth neutrality of the primary allocation is 

shown in the lack of clear trend in those bars. The higher education expenditure 

shows a distinct increase from lowest to highest wealth quartile. Higher education 

15 The provinces in each quartile are listed in Appendix 12. 

74



allocations thus appear to have a distinct disequalizing distribution, with greater 

resources per capita flowing to the higher wealth provinces. This pattern is 

inconsistent with policies calling for equity in educational opportunity. 

Figure 19 - Average primary and higher education expenditure per capita by 

province wealth quartiles 

Primary and Higher Education Expenditure Per Capita by Province Wealth Quartiles 

3000 

Average Expenditure per Capita (Baht) 

2500 

2000 

1500 

1000 

500 

0 

lowest 2 3 highest Total 

Wealth Quartiles 

Primary Exp/Capita 

Higher Ed Exp/Capita 

d. An examination of allocation of both financial and teacher resources to primary 

education shows a similar pattern of wealth neutrality. When the expenditure per 

pupil and student teacher ratios for primary education are compared across the 

province wealth quartiles, a consistently even distribution is shown, as in Figure 

20 below. This consistency with respect to wealth differences has both positive 

and negative implications. It is positive in that the existing policies and 

investments do not apparently aggravate existing wealth or other disparities, and 

reflect an even-handed approach to resource allocation. However, the wealth 

disparities among the provinces are substantial. To treat them all equally with 

respect to the government’s educational allocations does little to compensate for 

the disadvantages of poverty and relative isolation. More equitable resource 

allocation policies would include compensatory allocations of some magnitude as 

well. Approaches to such policies are discussed in the recommendations section. 

75



Figure 20 - Primary expenditure and student: teacher ratios by province wealth 

quartiles 

Primary Expenditure Per Pupil and Student: 

Teacher R atio by Province W ealth Q uartiles 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

lowest 2 3 highest Total 

Province W ealth Q uartiles 

Student/Teacher Ratio Expenditure (1000's) 

e. Other resource allocation patterns are more wealth neutral by comparison. The 

allocation of teachers among regions was examined to show relationships to 

relative wealth. Those comparisons are shown in Figure 21 below. The student 

teacher ratios for secondary levels are virtually equal across the regions, while 

there are substantial relative wealth among them. There is a bit more variation in 

the primary level student/teacher ratios, particularly between the northern and 

southern regions, with approximately 20:1 and slightly over 25:1 respectively. 

While significant in terms of financial implications, differences of this magnitude 

in class sizes are not likely to be important in educational terms. It is clear from 

Figure 21 that teacher allocation patterns are neither equalizing nor disequalizing 

relative to regional wealth. 

f. Equality of educational opportunity can also be reflected in the performance of 

the students or schools. In the absence of a national standardized achievement 

testing program, it is not possible to compare achievement among schools or 

provinces. However, the rate at which students successfully move up the levels of 

the educational system is a rough but meaningful indicator of the distribution of 

educational opportunity, not in terms of resources, but in terms of performance. It 

is therefore of some use to examine a comparison of transition rates across 

provinces in the similar way as with resource allocation. For these purposes the 

transition rates for lower and upper secondary were chosen. Such a comparison is 

likely to reflect variations in educational opportunity, since the transition rates 

overall from primary to lower secondary are quite high, but there is a substantial 

drop off from lower to upper secondary. Thus there is less likely to be substantial 

variation among provinces in primary-lower secondary transition rates. But larger 

76



variations in the lower-upper secondary transition are possible, and could reveal 

problems of inequity. Such an indicator can also be useful as way of identifying 

areas where additional resources can be allocated to compensate for lower 

educational opportunity or performance. The results of one analysis done to test 

this approach are shown in Figure 21 below. 

Figure 21 - Students per teacher and wealth by region 

Students per Teacher and Wealth by Region 

Students/teacher 

40 

35 

30 

25 

20 

15 

10 

5 

0 

central northeast northern southern Total 

Stu/Tchr-Prim Stu/Tchr-U. Sec. Stu/Tchr-L. Sec. Gross Prov. Prod/capita 

160 

140 

120 

100 

80 

60 

40 

20 

0 

Gross Prov. Product/capita 

g. The differences observed between primary-lower and lower-upper level 

transition rates are substantial, suggesting important disparities in educational 

opportunity. The range of almost 20 per cent between the lowest (Northeastern) 

and highest (Southern) rates is too large to be attributed to chance. Since the other 

three regions are roughly equal, the disparity between the high and low cases 

appears to represent some marked difference between the educational and socioeconomic 

conditions of these two regions. The difference cannot be attributed to 

variations in the resources allocated to the educational system, as the foregoing 

analysis shows. Nor is the basic wealth disparity between these two regions the 

greatest in the country. It is more likely that some combination of the social and 

economic conditions with the programs or operations of the schools combine to 

produce these large disparities. Since there are no apparent financial causes of this 

particular inequity problem, it is not analyzed further here. Rather it is presented 

to illustrate that problems of inequity in educational opportunity may not be 

directly caused by financial allocation policies. But the policies can be shaped to 

reduce or compensate in part for the negative impact of social and economic 

conditions on educational opportunity. 

77



Figure 22 - Secondary school transition rates by region 

Secondary School Transition Rates by Region 

100.0 

95.0 

90.0 

Transition Rate (%) 

85.0 

80.0 

75.0 

70.0 

Tr. Rate L. Sec. 

Tr. Rate U. Sec. 

65.0 

60.0 

central northeast northern southern Total 

2.5 Student count allocation mechanisms: implications for equity 

and efficiency 

2.5.1 The Student Count Allocation concept 

a. Proposals for funding education through per head allocations to any school are 

usually based on two separate but related arguments. One is an efficiency 

argument: that providing parents and students with easily exercised choices 

among schools will introduce or enhance a kind of product market for schooling, 

with each supplier competing with the others for students as customers. In 

summary form, this argument holds that the competition for students in this 

market will lead schools to offer higher quality education and control costs, thus 

making the system more efficient and effective. The other is an equity argument: 

that educational opportunity is inequitably distributed in the society, due primarily 

to large variations in parent’s ability to purchase high quality educational 

opportunities for their children. Richer parents can afford private schools, or to 

move or send their children to attend better public schools. Poorer parents cannot 

afford private schools and are less able to move or send their children to better 

public schools. Therefore children of poor families must attend whatever school is 

readily available, irrespective of its quality, thus restricting their educational 

opportunities. A finance system which supports public and private education 

equally has the effect of allowing poor parents to “purchase” higher quality 

private education, thus improving their children’s educational opportunities, and 

increasing the overall equity in the system. 

b. While the equity and efficiency goals of such a scheme are certainly desirable, 

the scheme’s ability to produce such results requires careful analysis. The success 

of such a scheme depends in part on the validity of a large number of assumptions 

78



implicit in these arguments. Those assumptions must be examined in detail. The 

success of a family choice finance scheme also depends on the capacity of the 

system to implement it in a way that is likely to produce the desired results. This 

capacity should also be carefully examined and tested to ensure feasibility. An 

approach to both of these tasks is outlined as part of this review. It begins with a 

discussion of the assumptions and details of the arguments for educational 

vouchers. 

2.5.1.1. The Equity Argument 

a. The basic premise of the equity side of the argument is that giving poor parents 

a free choice of schools to attend will allow them to obtain greater educational 

opportunities for their children by choosing the best available school, public or 

private. It is therefore necessary to examine the degree to which a child’s 

educational opportunity is likely to be affected by allowing a free, or heavily 

subsidized choice of schools. There is, in fact, a large body of evidence, from 

research in many countries, that the financial inputs to schooling have very little 

independent effect on children’s achievement (See, for example, Levin, 1997). 

This generalization is less accurate in developing countries, however, where the 

availability of books has been shown to be quite important. It has also been shown 

fairly consistently that students in private schools do not perform appreciably 

better than those in public schools, after a number of social and economic factors 

have been taken into account. These include the parent’s education levels, overall 

income, occupation, and the social makeup of the school. These tend to be much 

stronger influences on student performance than those under the control of the 

school. And it is these other factors that are not likely to be strongly affected by a 

finance scheme that allows greater choice, particularly parent’s education levels 

and overall income. 

b. The best approach to an analysis of the equity argument for this finance scheme 

is based on the premise that inequities in educational opportunity arise from 

different, but interacting sources. To be successful, a choice policy must recognize 

and deal with these sources effectively. Therefore it is necessary for a choice 

scheme to have some effect on the sources of the variations that underlie inequity 

in educational opportunity. One source, perhaps the most important, is variation in 

the family’s ability to pay for education. Another is variation in the family’s 

ability to provide non-financial resources necessary for their children to profit 

from schooling. These include their genetic endowment, health and nutrition, 

parent’s ability to participate and assist learning, their enthusiasm and 

encouragement for achievement, discipline, willingness to provide a rich learning 

environment in the home, etc. Other factors involve the characteristics of the 

educational and external environment which affect educational opportunity, but 

which are outside the direct control of individual families. One group of these 

factors includes the social and educational climate of the school, and the technical 

quality of the school itself. The other reflects the community’s and society’s value 

for education. For convenience, these four groups of factors will be referred to as 

family financial factors, family non-financial factors, school factors, and context 

factors. 

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c. The effectiveness of a choice policy on equity is linked directly to the ways in 

which the opening up of greater choices can counteract the other factors that 

produce inequity in educational opportunity. Access to otherwise unaffordable 

schools does of course ameliorate some family financial factors, since poor 

people’s choices of schools would otherwise be limited to those of lower quality 

than those available to rich people. By providing access to these better schools, 

the policy would reduce some of the inequities resulting from some school factors 

as well. These would include the quality of facilities, teachers, materials, etc., as 

well as a physical and social environment in the school itself that is more likely to 

be conducive to effective teaching and learning. 

d. But other factors would not be affected in significant ways. Some school 

factors are a consequence of the interaction of income and social advantages with 

geography. Higher incomes allow some families to live in areas with high 

concentrations of other high-income families. Thus the schools in these areas have 

higher concentrations of students from advantaged families characterized by 

higher parent education levels and occupational status. The overall composition of 

the student population is itself a school quality factor. Moreover, family nonfinancial 

factors are important as well. Parent’s education levels, provision of outof-school 

experiences and home learning resources, even health and nutrition are 

much more likely to be lower for children of poor families. And school choice 

policies will not have any direct impact in inequities resulting from parent’s lack 

of support for high achievement, poor student aptitude, or unwillingness or ability 

to participate in the child’s learning, or the community’s support or enthusiasm for 

education. 

2.5.1.2 The Efficiency Argument 

The essence of the efficiency argument in favor of a free choice schools rests on 

the potential impact of competition. The logic depends on thinking of schools as 

businesses competing for customers in a competitive environment. If the 

competition is restricted in some ways, there is less of an incentive for the schools 

to operate efficiently, since higher costs or lower quality of the “product” will not 

drive customers to the competition. The possible effect of the such a scheme on 

increasing competition by increasing the purchasing power of the customer, and 

effectively reducing the steep price advantage of the public school. If the lack of 

purchasing power and a subsidized price structure were the only flaws in the 

competitive environment, the free choice approach could have a strong impact. 

But competition can be impaired by other factors. There may be a lack of 

competitors in the environment, due to barriers to entry (as seems to be the case in 

the regulations governing private education). Consumers may also lack adequate 

information to evaluate the alternatives, or even know about their existence. This 

may be a particular problem in families with low education levels, restricting their 

knowledge about schools and their ability to assess them accurately. If the 

efficiency effects of free choices are to be realized, the scheme must deal with 

barriers to entry to the school “market” for private schools or other competitors, 

and it must provide support for consumer s in assessing schools. This should 

include some provisions for improved information provision discussed in the 

section on recommendations. 

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2.5.2 The Parental Choice focus groups 

a. To explore the possible impacts of a free choice scheme in Thailand, a study 

was conducted based on a small sample of parent focus groups. Since the concept 

of free choice is a complex one, it was felt that focus group-based discussion with 

parents would be the best way to explore the full range of their attitudes and 

potential responses to a free choice scheme. To help assess the effects of income 

and range of available choices on possible responses, the focus groups were 

formed in four districts, two in a high income province and two in a relatively low 

income province. The districts were chosen to reflect either a relatively high or 

low level of choice in terms of the number of nearby schools. Four schools were 

chosen in each district, one two each at the primary or secondary level, one public 

one private (one district did not have a private secondary school so the total 

number of schools chosen was 15). A group of 7-10 parents from each school was 

invited to attend a focus group discussion in an evening session, held off school 

property. The group discussion was recorded and summarized by the research 

team. (A detailed analysis of the parent’s comments is found in Appendix). 

b. The results of this focus group study reveal considerable complexity in parent’s 

views of school choice. The results also show that the impacts of a free choice 

scheme on the actual attendance patterns and parental choices will be very hard to 

predict. First, it was clear from the comments that parents have high expectations 

for their students and their schools. The comments reveal parents with a very high 

value for education, and a strong willingness to support education financially, and 

find the best schools for their children. As a result, the parents take into account 

more than expenses when choosing a school. The most frequently mentioned 

concerns were the reputation of the school, quality of teaching and school 

facilities, safety, closeness to home, attitudes and behavior of teachers, good 

discipline, and number and quality of activities and equipment. Of course the cost 

of sending children to school was mentioned frequently as well, but the cost 

factors mentioned extend beyond tuition and fees to clothing, transportation, food, 

and other incidentals. But it seems clear in the comments that financial 

considerations are only one, and not necessarily the major factor in this decision 

process. 

c. Because this is a multi-factor problem, introducing the free choice as away of 

alleviating the financial considerations does not by itself seem to produce massive 

changes in choices. All parents were asked what school they would choose if they 

did not have to pay for tuition and fees. Overall, only 38 of the 105 parents who 

responded (36.2%) said they would choose another school. In the districts with 

high choice (many alternative schools) the proportion who would change 

increased to 41%, a significant shift, but still well below half. And almost half of 

those who chose different schools (10/23) came from one primary school. 

d. The pattern of choice between public and private school alternatives is also 

illustrative of the importance of non-financial concerns. Of the 38 parents who 

would choose a different school, 33 (87%) chose public schools. The reasons 

expressed for these choices were predominately quality concerns, with 

convenience and safety mentioned frequently as well. If these results are 

81



indicative of the general response to a free choice scheme, it will not have the 

often-argued effect of increasing demand for private education. Considering the 

low quality reputation of many private schools (so-called “second choice” schools 

for those who cannot obtain seats in high reputation public schools), greater 

choice will have the short-term effect of increasing pressure on already oversubscribed 

public schools. Parents are concerned with reputations for quality, 

which develop slowly. Therefore removing or lowering financial constraints will 

not necessarily change preferences that are controlled by the supply side 

characteristics. 

e. Of course in the longer term, the free choice scheme can allow more subsidies 

to flow into private schools. Any private schools opened after 1974 do not receive 

direct subsidies, and the older schools have limits on what they can receive in 

subsidies or charge for tuition. With a free choice-driven increase in funding, 

private schools can develop higher quality programs and facilities, and compete 

with the currently better-funded public schools. But this process will not show 

major quality improvement in the short run. Instead, the availability of subsidized 

attendance at private schools may simply provide a windfall for wealthier parents 

who are paying tuition in the private schools. The data reported here (see Table 7) 

show that the family income of private school students is on average much higher 

than public school parents. The availability of a free choice for all private school 

parents, regardless of income, would simply lower the cost of private education 

for the wealthy as well as lower income families. This aspect of free choice policy 

is reflected in the BMA voucher pilot program, which makes vouchers available 

only for families with annual incomes below a set ceiling (120,000 Baht in the 

current version of the program). 

f. The capacity constraints in the school system can limit the degree to which a 

free choice scheme can reduce inequities. That is, the positive effects of consumer 

choices can only work in a situation where actual choices exist. These choices are 

most likely to exist at meaningful levels in urban or more densely populated areas. 

Therefore families in rural and remote areas will not be likely to receive the same 

level of benefit from a free choice scheme. Since these families and students are 

often disadvantaged in other ways as well, this weakness in the potential of free 

choice schemes can limit its positive impacts in some areas most in need of 

assistance. 

2.6. Information systems for financial management and 

policy 

a. Financing an efficient and effective education system requires high quality 

information resources for management and policy decision making. Therefore this 

review of the finance system includes attention to the information systems and 

resources involved in providing finances for education. The review considers two 

related questions: 

a.1. Is there adequate information and information technology for effective 

financial management and policy making? 

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a.2. Are the organizational arrangements and analysis resources adequate to make 

effective use of the available information? 

b. In suggesting answers to these questions attention is given primarily to the 

central government, where the major finance and management operations 

currently reside. However, in light of the decentralization initiative underway, 

some attention must be devoted to the information resource issues at the lower 

levels of the system. This review did not include an extensive study of provincial 

and local administration. But there were sufficient visits and interviews at lower 

levels to for a useful impression of the issues and prospects for development in a 

more decentralized system. 

2.6.1 Strengths of the current system 

a. The overall picture of information resources for educational finance is positive 

one in many important respects. The volume and timeliness of financial 

information are both generally adequate. Considerable resources have been 

invested in systems and procedures to collect, store, and process financial 

information in the various Ministries and Department with responsibility for 

financial allocations and management. The Ministry of Education has a 

functioning school census operation that collects annual data on school 

enrollments and operations for central reports. Considerable progress has been 

made in automating this collection process and using electronic reporting 

procedures and network connections to improve data flows. Monthly accounting 

reports are required from all schools and administrative units to monitor 

expenditure flows. Though not all in electronic form, these monthly reports appear 

to be processed in a timely manner. There is an extensive system of monthly 

reports for other financial tracking and program monitoring produced for other 

management levels: program operations and statistics to Department and Ministry 

Planning Divisions, financial reports to the Ministry of Finance, staffing reports to 

the Personnel Division, and so forth. In the Ministries of Education, Interior, and 

University Affairs, computerized databases and networks have been developed for 

managing much of this routine information flow and reporting. So in terms of 

sheer volume of information and routine collecting and reporting capacity, the 

various components of the education system have developed adequately. 

b. The development of these basic information resources appears to be 

accompanied by fairly large numbers of competent staff as well. The 

administrators responsible for the information systems and operations were highly 

trained and showed good grasp of the development issues discussed. Several had 

ambitious plans under way for improvements in their own unit’s capacities. In 

some cases, staff had developed sophisticated applications for specialized 

analyses, such as a geographic information system for school mapping in the 

Ministry of Education. There was also a relatively high percentage of desk-top 

computers in the offices of higher level administrators, indicating a familiarity and 

involvement with information technology at management and policy levels. This 

was true at the provincial, university, and school levels visited as well. In fact, 

some of the most detailed and well designed financial reporting we found came 

from a primary school in one of the northern provinces. As long as these human 

83



resources are developed and maintained, they will provide a sound base for 

continued improvement in the overall information environment. 

c. Maintaining skilled technical and professional personnel in the information 

technology field is not a simple task for government. The demand for these skills 

and abilities is quite high in the private sector, resulting in wage rates generally 

well above government levels. This can lead to a “brain drain” of IT staff from 

government agencies that makes it difficult to maintain and develop information 

systems and resources. A compensation and recruitment policy to address this 

problem is a necessary part of any information systems plan. 

d. Some areas of the education system are demonstrating a capacity to put these 

information resources to use in policy and management-related analysis. Simply 

collecting and processing large volumes of information is of little use in guiding a 

complex system of education. Sophisticated techniques are required to analyze 

and present results in ways that speak to critical issues and plans. Evidence of the 

capacity to perform these tasks is found in publications of the Office of the 

National Education Commission (ONEC), for example, on Educational Finance 

and on educational indicators bring together information from many sources to 

yield analyses for major policy and management issues. In addition, the Ministry 

of Education has recently developed the information base to participate in an 

OECD pilot project. This project supports new countries contributing data to the 

OECD Indicators publications, providing more valuable analyses for tracking and 

comparing educational systems and developments. These products illustrate the 

conceptual and management capacity in place to make good use of available 

information resources. 

2.6.2. Problems in the information environment 

a. Making full use of available information for educational finance requires the 

capacity to select, integrate, analyze, and interpret effectively. This capacity is not 

well developed in the information environment for educational finance. In order 

for policy makers and managers to build this capacity to a desirable level, it will 

be necessary to overcome some substantial problems in the organizational and 

technical environment in which finance information is produced and used. This 

section describes these problems as a background for recommendations for 

development strategies. 

b. The principal problem interfering with full and effective use of finance 

information is what is usually called a “stovepipe” approach to information 

resources. The term refers to the long pipe often used to vent smoke from a stove, 

passing up through the ceiling. Each stove has it’s own pipe. Smoke doesn’t mix 

across pipes, and the only view in a stovepipe is straight up or straight down. This 

image accurately describes the movement of information, financial and otherwise, 

in the educational system. The Ministries and Departments within Ministries 

maintain their own information flows down to the lower levels, and up from them 

in separate “pipes.” The information in one pipe does not mix with that from any 

other, and what the information tells the analyst or interpreter applies only to what 

happens up and down that pipe. In this kind of system, bringing information 

84



together to deal with integrative or system-wide questions is very difficult. Unless 

sufficient resources and organizational capacity are invested in overcoming these 

difficulties, system-wide questions, overall assessments, and questions of 

effectiveness and efficiency cannot be adequately dealt with. For example, the 

ONEC produced an excellent integrative report on educational system indicators 

and performance in 1993. It was so difficult and time consuming to find and 

integrate the information necessary to complete this report that it has not been 

updated. 

c. Another aspect of this dispersed approach is the absence of central coordination 

of educational statistics. The nominal responsibility for this coordination function 

lies with the ONEC. But the full authority and resources to perform this task are 

not available. Instead, there is a wide range of useful but not necessarily 

compatible or integrated reports. The Ministry of Education produces an annual 

summary of educational statistics. The ONEC produces numerous ad hoc reports, 

and the BOB and NESDB produce financial reports and ad hoc analyses. The 

Ministry of Education maintains a Web site with current data on it as well. But 

these separate resources add more to the volume than to the analytical utility of 

available information. 

d. The lack of coordinated statistics is accompanied by the lack of assessment 

information. There is no readily available, authoritative, timely, consistent source 

of performance information about school performance and quality. The lack of 

this kind of information limits the ability of students and parents to make 

informed choices of schools and limits the management and policy development 

functions of school administration. 

85



3. Recommendations 

3.1. An approach to education finance reforms 

a. To achieve the objectives set out in the Constitution, new Education Bill, the 

SSPL, and education plans, some major changes are needed in the ways schools 

are financed. Some changes involve the overall amounts to be made available for 

basic education. These changes and related issues will be discussed in a separate 

section. This section will focus on describing a new system for distributing 

financial resources to schools for the delivery of basic education. The discussion 

is based on the premises that basic education will consist of the first 12 years of 

schooling, beginning from Grade 1, and that this education will be provided free 

of tuition and fees in government or private schools. These premises are consistent 

with the provisions of the Constitution and current drafts of the new Education 

Bill. The discussion is also based on the premise that basic education will take 

place in an administrative structure that is considerably more decentralized than at 

present. Since the finance system is an integral part of any administrative system, 

any new approaches must be consistent with this movement toward greater 

decentralization. 

b. The main objectives for the finance system are to provide resources in a way 

that promotes equity and promotes access to a high quality, efficient basic 

education for all students. To achieve these main objectives, the finance system 

must be appropriate to the wide variety of circumstances of schools and students 

in basic education. In addition, the system should support the Government of 

Thailand’s policy calling for greater parent involvement in education as well as 

encouraging increased support for education from households and other private 

sources. Attending to this considerable range of objectives calls for a system with 

the flexibility to deal effectively with widely different schools, students, and local 

circumstance. The plan described here is designed to meet these requirements, as 

well as to provide a strategy that is adapted to the problems of implementing 

significant reforms in government. 

c. The mechanisms for financing education are an integral part of the overall 

institutional, policy, and management structures of the educational system. 

Consequently, it is not feasible to develop meaningful reforms of the financial 

components of the system that do not affect many other components as well. 

Therefore the recommendations presented here go beyond simple finance 

provisions, but extend directly and indirectly into significant changes for the 

decision making and policy structure of education as a whole. For the financial 

reforms to be effective, they must be considered and if possible enacted in a 

coordinated fashion with the other reform initiatives. In preparing these 

recommendations, considerable dialog has been conducted with those involved in 

the other reform areas. Therefore some of this coordination has already taken 

place. The remaining coordination and adjustment of these recommendations with 

the other reform initiatives should be an integral part of the deliberations to 

86



follow. That will help ensure an integrated and effective approach to these 

reforms. 

d. The knowledge that such coordination and integration will be necessary has 

guided this work in another way. These recommendations represent an approach 

to financing education that is intended to be both consistent with the other reform 

initiatives and adaptable to changes that may occur in the implementation of those 

other reforms. To achieve this objective requires that the recommendations be 

stated in a way that balances the need for adequate detail with that for 

adaptability. This suggests a presentation in sufficient detail to give clear direction 

for implementation without creating too rigid a model or set of procedures. The 

recommendations are consistent, hopefully, with that objective. 

3.2. Financing basic educational programs 

a. Consistent with this systemic approach to finance reforms, it is recommended 

that the Royal Thai Government budget for the support of education should 

consist of five new program areas, reflecting a major shift in the Government’s 

approach to the financing of education. The program areas are: 

a.1. Basic Educational Support 

a.2. Educational Equalization Support 

a.3. Educational Quality Assurance 

a.4. Educational Research and Quality Improvement 

a.5. Educational Infrastructure Development 

Each program serves a distinctive purpose and consequently has a different 

finance mechanism. 

b. The first role is that of providing a major share of the basic financial support for 

education. Rather than providing a mix of direct financing and resources in kind 

(teachers, buildings, etc.), the basic support function should consist of financial 

support. In this way, the planned decentralized control of the institutions will 

include responsibility for converting the allocated financial resources into the 

staff, material, and other goods and services necessary to operate educational 

programs. The proposed mechanisms for the Basic Education Support (BES) 

program are described below. 

c. The second role is that of equalizing opportunity, expressed in the Educational 

Equalization Program. This program will also allocate financial resources, but in a 

way to enhance the educational opportunities for disadvantaged students and 

institutions. This second allocation process is therefore separate from the BES 

program. 

d. The third role is ensuring that high quality performance of the educational 

system at all levels is developed and enhanced. Therefore the Educational Quality 

Assurance Program will be a mix of central and provincial operations to assess 

and support both the management and instructional performance of educational 

87



institutions. This will require development of new assessment and support 

capacities which are not described in full detail in this report, But they are seen as 

a necessary component of an efficient and effective educational system. The 

budget for this program could be built from the existing Quality Improvement 

program and additional funds for the development of a national-level assessment 

and quality assurance capacity. Since a variety of assessment and evaluation 

activities are already underway in various components of the government, some 

consolidation of these activities into a single responsible agency (perhaps as part 

of the ONEC), would be desirable. 

e. The fourth role is in part a new one for the Government. There is already a 

Quality Improvement program in the budget structure. However, these funds are 

used in a mix of support of research and innovation, and for enhancements of 

existing programs and operations. The emphasis of this program should be shifted 

to emphasize research and innovation. The funds should be allocated on a 

competitive basis for projects and research activities that have high potential to 

improve the overall quality of the educational system. 

f. The fifth role is a recasting of the capital investment portions of the educational 

budget. The responsibility for infrastructure development and maintenance should 

be shared by the national and lower levels of the system. The national level 

responsibility should extend to a mix of major infrastructure projects with national 

importance (such as networking infrastructure for schools), and support for local 

and provincial investment. Local and provincial capital projects should be shifted 

from the current budget appropriations framework and be financed out of 

borrowing from the private sector. The legal authority and local revenue-raising 

capacity for borrowing should be enacted for the provincial, and if possible lower 

levels of administration. Similar authority has already been provided higher 

education institutions and appears to be working effectively. The national 

government should provide assistance to the less wealthy local authorities in the 

form of subsidies for debt service indexed to local wealth. The details and rational 

for this shift in capital expenditure are presented in section 3.2.2.4 below. 

3.2.1 The basic educational support program 

a. The allocation of government resources to basic education in this new system 

would be based on concept of shared responsibility for providing financial support 

for the schools. This responsibility is to be shared among the central government, 

the provincial government, the local or school government, and the parents. Each 

would have the responsibility to provide financial support for the schools, under 

different mechanisms. There would be two mechanisms for the central 

government. One would be to provide a basic subsidy to all children enrolled in 

basic education. The second would be through an educational equity subsidy to 

the lower wealth provinces to supplement the funds available for school support 

(the mechanism for this subsidy is described on p. 98 below). Provincial support 

would consist of the allocation of the equity subsidy among schools enrolling 

disadvantaged students, and provision of additional subsidies from provincial 

revenues. The local government mechanism would be through locally raised 

revenue from various taxes and other sources. The level of parent support would 

88



vary according to local taxation and family income such that contributions to the 

local schools would be greater for families with higher incomes or ability to pay. 

Each mechanism can be designed and adjusted to provide resources in an 

equitable manner and to encourage local effort in providing resources for schools. 

The finance system described here applies to government schools only. A separate 

section on private school finance follows. 

b. The subsidy from the central, and if called for, the provincial level, would be 

distributed as block amounts, rather than as detailed budgets. This will allow the 

local school authorities to decide how to allocate their resources for most efficient 

use. 

c. For the initial design of the finance system, the operation of the schools is 

assumed to be decentralized to the provincial, and local education levels 16 . That is, 

the operational and local financial responsibility for basic education would be 

devolved to the province, district, and municipality. In some sparsely settled rural 

areas, school administrative and financial operations may have to be located in 

some combination of sub-districts or other units, depending on local conditions. 

When local financial responsibility and decision making is referred to below, it 

refers to either the municipality or school as the main administrative unit. In 

general, this is referred to as the Local Education Authority (LEA). For this or any 

other sort of decentralized finance and administrative system to work effectively, 

there must be an adequately functioning local authority with jurisdiction over 

basic education. This discussion of finance presumes the existence of such an 

authority, with some local revenue raising power. 

d. The details of how such a unit would be formed are not an immediate financial 

issue, but are nonetheless an important part of the implementation process. For 

purposes of this discussion it is assumed that the province is the primary local 

authority. For implementing a decentralized finance system, the province would 

be charged with developing a plan for how sub-province units would be formed 

and operated, following guidelines from the Ministry of Education. Once 

approved by provincial authorities and the Ministry of Education, the plan would 

be the basis for creating and operating local education authorities. It would also be 

possible for the provincial government to maintain jurisdiction and forego sub 

units for school administration. Since this new system is a major departure from 

past practice, it would be useful to have a phase-in process of more gradual 

reorganization. Allowing provinces to develop their own plans for creating subunits 

can provide such a phase-in period during which provincial and local 

administrators can work out the approach best suited to their circumstances. 

e. The issue of how to treat the Bangkok Metropolitan Authority in this scheme is 

not taken up here. BMA could remain as an autonomous unit for the operation of 

its own schools, absorbing the existing government schools within its borders, or 

be subdivided into smaller operating units for a higher degree of decentralization. 

16 The current legal definition of local education authorities does not specify the unit or level involved. This 

issue will be settled in part by further legislation. However a mechanism for designed lower level units is 

included in these recommendations. 

89



The details of how this municipal-level decentralization is eventually decided will 

not materially affect the operation of the finance scheme described here. 

3.2.2. Allocation issues 

a. The Basic Educational Support Program is intended to provide a foundation of 

financial resources across institutions. Thus the amount of the allocation for each 

level of the education system will be different, depending on the determination of 

the appropriate amounts for each. The Basic Education Support allocations within 

each level should be in the form of block grants to each institution based on the 

number of students in effective attendance. The issue of how to determine 

effective attendance is taken up in a later section. The base amount of the support 

will be calculated as 80 per cent of what is judged to be the appropriate level of 

recurrent expenditure per student for each level or type of educational institution 

(primary, lower secondary, upper secondary, higher education, etc.). The section 

on per-student expenditure analysis describes the recommended approach to 

setting an appropriate level of basic per student support. Since this basic support 

level will not be sufficient for program operation in most cases, and is not 

responsive to local needs and circumstances, there should be additional allocation 

and revenue generating mechanisms to make up a comprehensive finance system. 

Part of this additional funding is dealt with through the Educational Equalization 

Program. Other resources are provided for through local revenue raising. These 

mechanisms are described in Section 3.2.3 below. 

b. Before describing the details of the allocation mechanisms, the nature and 

implications of the block grant approach require some discussion. This kind of 

mechanisms is, in some respects, a major departure from the current budget 

allocation and control method (the line item budget). As the term is used here 

“block grants” to the institutional level mean that the discretion and control of 

resource allocation to the various programs and objects of expenditure are 

transferred from the national to the local level. It also means, therefore, that the 

major responsibility for the efficient and effective use of those resources shifts to 

that level as well. This approach means that the educational finance policy issues 

at the national level shift as well. Instead of attention to distribution across 

Ministries, Departments, and agencies, the policy debate will necessarily focus on 

the appropriate levels of support for education, the operation of the allocation 

mechanisms, and the priorities for assessment, research, and improvement. That 

is, the importance of the role of the national government does not diminish, but 

rather shifts more directly to allocative and performance issues. 

c. In one respect, the block grant approach is not as large a departure from the 

status quo as it might appear on the surface. The existing budget allocations are 

based in large part on incremental adjustments to the allocations requested by the 

lower levels of the system. Therefore what emerges as the line item budget for any 

particular institution reflects important inputs from that local level. So the original 

allocation is quite likely to reflect, at least in some ways, the allocation decisions 

and preferences of the local administrators. The main difference under the block 

grant scheme is that the local authorities have the discretion to adjust their local 

budget from the block grant to more closely fit local needs and circumstances. 

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3.2.2.1. Overall education budget and expenditure patterns 

The overall level of financial allocation from the Government and private sources 

appears to be roughly in line with other countries in the region. But there is still a 

gap between Thailand’s level of investment in education and that of more 

developed countries. Longer term planning should include goals of increasing the 

allocations to education to at least 5 per cent of GDP, which would be achieved by 

maintaining the recent upward trend. The balance among types of expenditure for 

the current and recent past budgets seems tipped in favor of heavier investment on 

the capital side. It is not clear whether this is a result of specific policies to 

enhance infrastructure, or just the accumulated effect of uncoordinated decisions. 

The new finance policies, especially expanding opportunities for secondary 

education may require continued high capital expenditure in the short run to build 

the necessary facilities. The Government should conduct a detailed facility 

capacity study to examine this possibility. Expenditures on central administration 

also appear to be larger than necessary, and will probably drop as a result of 

downsizing and consolidation of central Ministries. The level of expenditure on 

higher education subsidies cannot be justified on either efficiency or equity 

grounds and should be reduced. Increased investments in pre-primary and primary 

education quality and access are likely to produce greater returns in terms of 

overall quality and efficiency. Distribution of financial and teacher resources 

appears to treat most provinces and regions equally, but does little to compensate 

for economic disadvantages. The allocation of financial resources to higher 

education is an exception to this general pattern, since higher education resource 

allocations tend to be disequalizing, going disproportionately to wealthier 

provinces. 

3.2.2.2 Block grants and salaries 

a. The block grant approach, if fully implemented, should cover all the school 

financial resources, including staff salaries. Since these salaries and the staff that 

go with the salaries are such a large and important component of the operation, 

they should be subject to managerial control and decision making at the 

operational (institutional) level. That is, the funding of staff salaries, as well as the 

financing of other resources, should in effect follow the children. However, 

allowing local control over salaries and staff employment is a major departure 

from the current arrangements. To implement the block grant approach to staffing 

and salaries in a short period of time could be very disruptive to morale, overall 

staffing patterns, and abruptly place a large additional administrative load on the 

local administrators. The move to the full block grant approach should therefore 

be planned over a longer time frame and proceed in stages. The description of the 

finance scheme also raises a number of possible issues of personnel and salary 

policy. For some of these issues, it is assumed that the existing personnel policies 

with respect to benefits, pensions, and matters of routine personnel administration 

will remain unchanged. The main changes will be in the locus of the hiring and 

retention decision, and the establishment of salary levels. The issues of salary 

levels and hiring are discussed below. 

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b. Moving the financing of staff salaries from the central to the local level will 

require a gradual transition period. One approach to this would be to phase in the 

transition over a five-year period. The employment of the staff would shift from 

the central to the local level in the first year, but with staff retaining full civil 

service rights and salary levels. During that period, the block grant would consist 

of two components. The first would be the non-salary component of the basic 

support level. The other would be a salary portion to cover the salary obligations 

for the existing staff (benefits such as pensions would continue to be funded at the 

national level). In the first year, the salary component would cover the full salary 

obligation of the existing staff in each school. In each subsequent year, the salary 

component of the basic grant would be reduced by 20 per cent, and the non-salary 

component would be increased by an amount equal to 20 per cent of the salary 

budget the school would have if all it’s teachers were paid at the average for that 

type of school. For schools with a relatively high seniority, high salary staff, this 

shift would result in a slow decrease in the budget available for salaries, and 

require the local school to either raise more local revenues or use staff in more 

efficient ways. For institutions with relatively low seniority, low salary staff, the 

shift would slowly increase the salary funds available, allowing those schools to 

improve programs or compete for higher seniority teachers. When an institution 

loses staff during this period, through retirement or other attrition, the salary 

component of the block grant would be reduced by the amount of the staff salary, 

and the non-salary component would be increased by the average amount 

described above. 

c. Over such a phase-in period, the local institutions would have ample 

opportunity to plan for staff changes and shifting resources to adjust to the budget 

changes. With normal staff turn-over and careful planning, the extent of the 

disruption or negative impact on institutions or individual staff should be kept to a 

minimum. However in some local areas the existing staffing patterns may be such 

that the phase-in process causes serious problems. To deal with this contingency, 

the phase-in period should include a special budget allocation for a staff 

adjustment fund at each province. If administrators in a local institution need short 

term financial assistance to manage the transition period, they would apply to the 

provincial education office for a temporary allocation from this fund. The fund 

would be available for the five-year phase-in period, but would expire at end of 

that time period. 

3.2.2.3 Appropriate expenditure and cost sharing levels 

a. In developing a method for determining appropriate expenditure levels the 

recommendations presented here deliberately avoid the use of a cross-sectional 

production function or historically based calculation of what are usually called 

“unit costs”. Of course, any block grant or student count-driven approach to 

educational finance requires a way of setting per-student amounts or guidelines. In 

the current policy-making setting for educational finance in Thailand, this is 

commonly referred to as the “unit cost” issue. In these recommendations, 

however, it is referred to instead as the issue of per-student amounts or guidelines. 

This is done to emphasize the distinction between a policy decision on per-student 

amounts that is based on a mix of analytical and political factors versus a true 

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“unit cost” determination that would be based on some empirical analysis of the 

full range of factor costs for the operation of educational programs, i.e., a 

production function style of analysis. In the first instance, the empirical basis for 

such a unit cost analysis is not available and has not been used in the past 

(although in principle it could be). What is currently used as a “unit cost” 

calculation is based on a relatively crude and highly aggregated combination of 

past central government expenditures. More importantly, the results of this current 

approach represent little more than an historical artifact. The same would be true 

of a typical production function type of analysis in the Thai setting. That is, the 

data on which such an analysis would be based are the results of a long-term 

history of administrative decisions, not influenced by competitive pressures or 

attempts to optimize productivity. Moreover, the variation in input levels across 

regions and levels of schools would mean any single “unit cost” figure would 

represent only one point, and an arbitrary one at that, in what is sure to be a wide 

distribution of per-student expenditure patterns. 

b. In the finance system recommended here, per-student amounts are critically 

important. They will determine the overall amounts of education expenditures, 

and will strongly influence both quality and equity in the system. Thus these perstudent 

amounts are central educational policies. As such they should be the focus 

of policy debate and be based on present priorities and goals for the future, not 

locked into the history of past allocations made under a different system. At the 

same time, the amounts must be realistic and feasible given the existing financial 

and institutional constraints in the government. Therefore a per-student amount 

determination involves a mix of technical and political issues. The political issues 

are matters of national goals and education priorities, not of financial analysis, and 

so are taken up in this review. The technical issues include how to estimate 

appropriate guidelines for these per-student amounts, and how to employ the 

guidelines in allocation decision making. 

3.2.2.4. Student accounting and reporting 

a. The current methods of accounting for students in schools and classrooms must 

be revised to provide more accurate and reliable data. The official number of 

students in each school is currently taken to be the reported enrollment in the 

annual June data collection time period. Using a single annual student count 

provides no financial incentives for teachers or administrators to maintain 

attendance levels at other times in the year. Moreover, in- and out-migration of 

students can substantially change a school’s true attendance during the course of a 

school year. In addition, there are persistent reports of so-called “ghost students” 

who appear on enrollment reports but do not attend, artificially inflating the 

schools apparent need for resources. It is difficult to evaluate such reports without 

a large number of site visits to individual classrooms, which were not undertaken 

as part of this review. These factors all suggest that the current enrollment data 

does not accurately reflect the actual numbers of students in classrooms on a dayto-day 

basis. It is this latter number that represents the school level demand for 

resources that should be the basis for allocation decisions. Therefore enrollment as 

currently construed should not be the basis for financial allocations as described 

here. 

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b. The method recommended here is the use of actual attendance counts, on a 

weekly or monthly basis. Schools could report average weekly attendance instead 

of June enrollment as their official student count. Since schools already do take 

attendance regularly, this would not represent a substantial additional clerical 

burden on teachers or administrators. It would simply be necessary for provincial 

and central officials to devise new procedures and reporting processes to collect 

this information. It would also be necessary for periodic auditing of attendance 

reports to ensure accuracy. This could become part of the routine financial 

auditing processed conducted by the provincial education authorities under the 

decentralized system. 

3.2.2.5. Per-student guideline method 

a. This method is based on the assumption that finance allocation policy should 

reflect concern for both quality and efficiency. Therefore, the per-student amounts 

should be based on some estimate of the cost of an efficient, high quality program. 

Rather than a cross-sectional approach, these estimates could be based on a 

sample of high performing schools at each level and in each region or province. 

The high performance criteria for selecting the sample should be comprehensive, 

so that the sample includes schools that reflect a diversity of different models or 

concepts of high performance. A detailed survey of inputs and input costs should 

then be done in each school by a team of researchers visiting each school. The 

data should include reviewing budgets, all revenues and expenditures, 

contributions in kind, etc., broken out by level and subject of study. The 

researchers will also collect data on student outcomes, including achievement 

scores, transition rates, possibly reverse tracer studies to review success of 

graduates as well. These data can then be used to calculate per-student input costs 

for all the schools in the sample. Since all the schools are high performing, the 

lower per-student input costs would reflect greater efficiencies. These efficiencies 

could then be statistically adjusted for the effects of non-financial inputs that 

could effect efficiencies, such as student previous achievement, socioeconomic 

status, and teacher qualifications. The adjusted per-student expenditures would 

more closely reflect operational efficiencies and could then be used as guidelines 

for per-student amounts in allocation policies. 

b. Since conditions change and performance may vary considerably from year to 

year, this estimating procedure would properly be an annual or biennial activity. 

To keep the sample representative of existing schools, it should be re-drawn for 

each estimate. The schools and results of the studies should be a matter of public 

record after the fact, so as to ensure transparency and fairness in the analysis. 

3.2.2.6. Allocation modeling and decision making 

Using formulas and per-student calculations in educational finance policy making 

adds a layer of complexity to the process. When decisions are made in terms of 

overall allocation amounts, the budget and distributional consequences of the 

decisions are readily and quickly calculated. When the policy decision making is 

in terms of formulas and per-student amounts, understanding the consequences 

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requires more complex calculations, based on models or simulations of the finance 

system, enrollments, and school distributions. The use of such tools requires an 

up-to-date database with the necessary inputs to the calculations, as well as the 

appropriate calculation tools. The calculation tools are well understood and 

readily available, though not in common use in this setting. So establishing the 

analytical capacity for testing the consequences of formula alternatives is not a 

major problem. It would require training of a relatively small number of central 

government staff in the basic techniques, the acquisition of appropriate software 

and computing equipment, and development of the specific models reflecting the 

Thai policy context. However, the lack of adequate data is a serious impediment 

to this approach. Attention to this matter is discussed in the section on overall 

information systems problems and recommendations. 

3.2.2.7. Appropriate sharing levels 

The sharing of financial responsibility is another key issue in the design of a 

finance system. The recommendation for this system is an 80/20 per cent central 

vs. local sharing ratio. That is, the overall ratio of central government to local 

educational authority expenditure would be in a ratio of 80 per cent central to 20 

per cent local. The 80 per cent proportion in this recommendation is chosen 

arbitrarily as the point from which to conduct the policy debate. The matter of 

what sharing proportion is appropriate for the central government is a major 

policy issue. The number chosen will affect the overall size of the education 

budget, as well as the operation of the equalization support mechanism. So the 

proposal for this particular sharing level is intended to be a reasonable starting 

point for that debate, not a final recommendation based on some scientific 

analysis. The way in which the 80 per cent share operates in the overall finance 

scheme is discussed in more detail below. 

3.2.2.8. The issue of mobilizing private resources 

a. These recommendations concentrate primarily on allocation of government 

revenues to education, and relatively little attention to private resources. The main 

discussion of private resources is in a later section on higher education finance. 

But some discussion of the general issue of mobilizing private resources is useful 

at this point. In current discussions of finance system reforms, considerable 

rhetoric has been addressed to the topic of mobilizing increased flows of private 

resources into education. One premise underlying this objective is flawed, and as a 

result the rhetoric is often misleading and counterproductive. The basic flaw is the 

implicit notion that school finances come from two sources: government 

resources and private resources. But in fact all government resources come, in the 

first instance, from the private sector, whether it be through collection of taxes, 

operation of state enterprises, or direct conscription of labor, as in the military. 

Thus all the financial resources that government now allocates to education are 

mobilized from the private sector. Therefore the implications of a proposal to 

mobilize more financial resources from the private sector really hinge on whether 

the mechanism of mobilization is compulsory, as in a tax increase, or voluntary. It 

is assumed here that these proposals refer to voluntary mechanisms, rather than 

tax increases. 

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b. There are two major deficiencies with voluntary mechanisms to be effective. 

First, the economic incentives for voluntary contributions have undesirable effects 

on resource allocation and equity. To be effective voluntary mechanisms require 

some incentive for the private individual or organization to contribute resources to 

education. These may be economic incentives, such as reduced tax liability, or 

investment in their own or a family member’s human capital and future income 

potential. Or the incentives may be non-financial, such as a desire to help children, 

improve a community or society in general, or express religious beliefs. 

Government policy is not likely to have much impact on the non-financial 

incentives, so is not analyzed here. The tax-based incentives in the current new 

policy proposals (Education Bill) do not represent a savings to the government 

since they are tax credits; each Baht of contribution represents a Baht of revenue 

loss. These incentives simply shift the control over where the government 

resources are allocated from the government itself to the individual contributor. 

This can be an effective incentive, since it allows a person or organization to 

allocate government resources in a way to produce personal benefits. It is also a 

disequalizing mechanism, since richer persons have more discretionary funds to 

take advantage of this incentive, and may be taxed at higher rates than the poor. 

c. The second problem with mobilizing private resources is that it introduces 

potentially high levels of uncertainty into the financing of essential government 

services. Voluntary contributions can vary greatly from year to year, as the school 

survey results reported above show. This can create planning problems and 

inefficiencies in local school management. If the revenue flow from the private 

sector is irregular, it cannot be used to support services that require regular 

expenditures, such as staff salaries, utilities, routine supplies and activities, etc. 

Therefore the support for these basic operations must come predominately from 

regular sources--either regular appropriations, or stable income from investments. 

Irregular revenues will thus be used for special projects or investments, or be used 

in unplanned and possible inefficient ways. This is not a sound foundation for 

provision of education. 

3.2.3. Financial allocation mechanisms 

Based on this administrative structure, there would be three normal government 

revenue streams into the schools. The first would be the basic subsidy from the 

central government, in the form of block subsidies based on the student count. The 

school's revenue from this source would, thus, depend on the number of students 

who maintain effective enrollment in any given year and on the size of the perstudent 

guideline. The size of the subsidies would be a uniform per-student 

amount. It should be fixed through an annual policy decision that reflects the 

central government’s responsibility relative to the share of tax revenues it collects. 

That is, if the central government continues to collect the largest proportion of 

total tax revenues, as through the VAT, etc., then its educational subsidy 

responsibility should be correspondingly large. 

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3.2.3.1. Basic subsidy 

a. The central subsidy is designated as uniform for all students in order to simplify 

the budget calculations at the central level. This minimizes the need for the central 

government to collect and act upon information reflecting individual household's 

ability to pay. It does not provide for a fully equitable distribution of resources, 

however, due to the large differences in provincial and local abilities to support 

their share of educational finances. That consideration is addressed through the 

equalizing mechanism described in the following section. 

b. With respect to enrollment, the policy and procedures for counting effective 

enrollment would be structured to encourage the schools to maintain high 

attendance rates. For example, effective enrollment could be defined as attendance 

in a certain minimum percentage (such as 90%) of the school days, or on average 

daily attendance, or some similar data. Specific policies and regulations would be 

needed to establish the procedures and controls for reporting attendance and 

ensuring accurate data. 

3.2.3.2. Equalization mechanism 

a. The equalizing portion of the finance mechanism would operate through 

adjusting the local share of total educational expenditure to reflect local ability to 

pay. Each local school authority would know what its basic revenue is from the 

central subsidy and any provincial subsidies. If the LEA decides, through a 

democratic process, to offer only what education that revenue will buy, then it will 

have no local tax burden or local revenue-raising responsibility for education. 

However, the actual size of the central subsidy should low enough so that only in 

very low income/cost areas is it likely to be considered sufficient. More detailed 

recommendations on how to establish the size of this basic subsidy are included in 

a separate section. 

b. If the local education authority (LEA) decides to increase the local budget, it 

will receive a subsidy from the province, based on a share (per cent) of the amount 

that the local per capita budget exceeds the central subsidy. The actual sharing 

percentage will be based on the wealth of the LEA and proportion of 

disadvantaged students. In this way, poorer LEA's and ones with concentrations of 

poor students will receive more revenue than richer LEA's for the same financial 

effort. The funds available for the provincial subsidy will come from the 

equalizing grant from the central government, based inversely on provincial 

wealth, and on provincial tax revenues. 

c. The responsibility of the central government is limited in this scheme to the 

basic subsidy and equalizing grants to the provinces. Since the equalizing grants 

will be determined by a need-based formula, the total available to a province must 

be limited in a given budget cycle or fiscal year. The proposed formula for this 

allocation should take into account the amount needed for an adequate education, 

and the relative fiscal need of the LEA's in the province itself. The approach to the 

formula for province allocations recommended here is based on a calculation of 

the total the province would need to provide equalizing grants for it's schools to 

"top-up" the central subsidy to a standard level for an adequate education across 

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all LEA's. The central government would have to set the policy for this standard 

level, the expenditure level judged necessary to provide an adequate education 

(subject to adjustment each budget cycle). Then, using the formula for each LEA's 

equalizing grant, the province would calculate the amount necessary to "top-up" 

each of its LEA's to the standard "adequate" level. The central government would 

then provide a fixed proportion of this equalizing amount to the province (say 

80%), and the remainder would be derived from provincial resources. The 

central/provincial sharing ratio could also be adjusted to reflect the relative wealth 

of the province as well. 17 

d. For example, suppose the standard for an adequate education is set at 100,000 

Baht per student per year, 18 and the basic central subsidy is 50,000 Baht per 

student with an additional average of 30,000 Baht per student allocated as 

equalization subsidies. Consider two LEA's, one poor, one rich, who decide that 

they need only the 100,000 Baht per student for an adequate education. If the poor 

LEA's cost sharing percentage is low, the LEA would only have to raise, say, 

5,000 Baht to receive another 45,000 from the provincial equalizing fund. For the 

rich LEA, the sharing proportion might be higher so that the rich LEA would have 

to raise 45,000 Baht in taxes, to receive a 5,000 Baht subsidy and raise the total to 

100,000. (See Figure 23 below). Thus all LEA's have an incentive to raise local 

revenue to support education, but the equalizing portion of the finance system 

allows poorer schools to provide quality education although local resources are 

small. 

Figure 23 - Example of finance flows 

Poor LEA 

5,000 

Local tax revenue 

35,000 

Rich LEA 

45,000 

Equalizing Grant 

15,000 

50,000 50,000 

Central Subsidy 

17 The desired distribution of funds can be achieved through several kinds of allocation schemes or 

formulas. An example of an allocation method and formula are found in Appendix 7 

18 The amounts used in this example are for illustration only and are not a recommendation about actual 


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3.2.3.3. Incentives for local participation 

a. This approach to shared financial responsibility provides incentives for local 

education authorities, and through them the parents, to support their schools. The 

amount of local tax revenue they raise goes to their own schools. There is already 

considerable evidence that local communities and families in Thailand are willing 

to provide substantial financial support for their children's schooling (See section 

2.3.1.1. above and Bray, 1994). This willingness should therefore be reflected in 

local decision making about budgets and taxation. 

b. This sort of taxation and finance system provides incentives for local 

communities to increase their support for the schools. If the taxation system is 

revised to provide such local autonomy, the result should be to increase the flow 

of resources into education. One incentive is a result of the equalizing effect of the 

sharing ratio, which means that lower income LEA's receive a larger benefit for 

each Baht of tax revenue they raise for schools. This should act as an effective 

incentive for the lower income communities. Since poor families already devote a 

substantial proportion of their income to education (Bray, 1994), it seems likely 

that they would be influenced by such an incentive structure. 

c. The financial and administrative authority that accompany such a finance 

system can operate as an incentive for wealthier communities to mobilize support 

for their schools as well. That is, the schools will likely be seen as belonging more 

to the communities and parents, and less to the central government. This 

ownership and enhanced ability to influence how resources are used would 

increase the willingness to increase support. While this principle is difficult to 

fully demonstrate with empirical research, it is a central feature in most reform 

arguments about both decentralization and financial structures (Patrinos and 

Ariasingam, 1997). 

3.2.3.4 Capital financing 

a. The third revenue stream would be for special projects, quality improvement, 

and capital construction. The basic funding for these projects could be distributed 

through block grants from the central to the provincial level, using the same 

formula calculation as for the equalizing grants for basic education. Capital 

construction funds could continue to be provided from the central level, but there 

is a strong case to be made for using private capital markets. Provincial tax 

revenues can supplement the grants for quality improvement and related special 

projects as well. The distribution within provinces would be up to provincial-level 

criteria and decision processes, within guidelines set at the central level. 

b. A preferable alternative for capital construction costs would be to change the 

legal structures to allow provincial or certain forms of local governments (e.g., 

municipalities) to incur their own debt. With the authority to borrow directly from 

private capital markets, these LEA’s and governments could finance their own 

long-term capital projects, with the debt service payments included as part of the 

recurrent budget. Such a scheme has several advantages over the present one. It 

has the capacity to mobilize additional resources from the province and local 

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governments by taking advantage of resources available in private capital markets. 

This would also establish prices for the construction projects at the prevailing 

rates in the capital markets, and match the time frame for payment more closely to 

the time frame for receiving the benefits of the expenditure. These features would 

impose a more rational framework on capital investments decisions. In addition, 

the full financial responsibility for capital construction projects would lie with the 

government units closer to the assets and their use, and thus in better position to 

make investment decisions and to manage asset use and proper maintenance. 

c. Another advantage of financing capital construction through borrowing in 

private capital markets is to insulate long-term capital investment decisions and 

construction projects from the effects of short-term budget problems. Discussions 

with administrators about the impacts of the economic crisis included descriptions 

of decision strategies that illustrate the need for such insulation. One common 

response to the economic crisis was to cut back severely on capital projects, both 

new initiatives and ones under development. When capital construction is 

financed through current revenues, this is a reasonable and effective strategy to 

achieve short-term savings. But there are several deleterious effects of such a 

strategy. Construction activity typically has a strong multiplier effect. So cutting 

sharply on construction spending can exacerbate recessionary trends. More 

important, perhaps, is a kind of "opportunity cost" involved when the large 

amounts of discretionary construction funds provide for relatively easy short termbudget 

reductions. The government loses the "opportunity" (or necessity) to 

review structural inefficiencies or institute innovations that might produce even 

greater savings over a longer term. In addition, suspending construction involves 

costs as well. These can include deterioration and related loses from partially 

finished structures, penalties for disruption of contractual commitments, and 

disruptions of programs due to the absence of planned facilities. 

3.2.3.5 Supply-side versus demand-side finance of education 

a. There has been much discussion of what has come to be called "demand-side" 

as opposed to "supply-side" financing of education. The apparent issue involved 

in this discussion is whether the flow of resources to education should be 

determined by or controlled by the "supply-side" (i.e., the suppliers of education, 

schools and their administrative structures), or the "demand-side," (i.e., those 

demanding educational services, parents and students). In this discussion, the 

current state of education in Thailand is characterized as dominated by the 

"supply-side," i.e., the government providers of schooling. Any reforms 

undertaken should increase the responsiveness of the schools to the "demand 

side," i.e., the consumer. This would presumably improve quality as well. It is also 

implied, though not necessarily stated, that the amount and types of schooling 

supplied should more closely match demand. It is also argued that the demands of 

the consumers will lead to more effective or more rapid reforms as well. 

b. These demand side initiatives in other countries have taken the same form as 

many of the reform initiatives in progress in Thailand: targeted subsidies, 

vouchers, student loans, community grants, and other forms of public assistance to 

private schools. Demand side financing has also used stipends directly to students 

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and some forms of community-level financing. There is some evidence that these 

mechanisms can have the desired effects, but the pattern of success is not strong 

or consistent (Patrinos and Ariasingam, 1997). Therefore there is reason to be 

optimistic about the prospects for the positive effects of demand-side financing 

initiatives for Thailand. 

3.2.3.6. School performance and financial allocations 

The allocation mechanisms for providing resources for education programs should 

be separate from the administrative and management mechanisms for ensuring 

efficient and effective performance of school staff. It is, of course both feasible 

and appropriate to create financial incentives for teachers and administrators to 

improve their performance, or to provide sanctions for the same teachers and 

administrators for ineffective or improper performance. But the incentives or 

sanctions must be targeted at individual teachers or administrators, not at the 

levels of support for the programs themselves. It is therefore inappropriate and 

ultimately unworkable to link budgets for programs to the performance of the 

students in those programs in such a way that punishes students for ineffective 

teaching or administration. In fact is it often the case that low test scores or 

graduation rates in a school indicate a need for more resources, as would be the 

case if the school served disadvantaged students. Reducing the budget for any 

schools with low performance indicators, as some current proposals recommend, 

should not be part of the finance system at all. Instead, incentives and/or sanctions 

for inadequately performing school staff should be part of the educational 

management structure. In that way such measures can be properly targeted and 

used to improve rather than hurt educational programs. 

3.2.4 Measure of need for local educational authorities 

a. The effectiveness of equalization allocations depends in part on how well they 

can be targeted to the areas of greatest financial need. This requires accurate 

measures of the financial capacity and needs of the local unit responsible for 

financial support. Ideally, these measures of financial capacity and need would 

identify individual schools, or even individual households, so that the targeting 

could be as precise as possible. At present, however, this is not fully possible. 

Since most localities have relatively limited taxing authority, their current fiscal 

capacity is not a good indicator of their overall financial resources or wealth base 

from which additional educational funding could be derived. Neither are there 

reliable, readily available measures of the wealth or income of individual 

households. That is why under the recommendations above, the equalizing 

subsidies are targeted first at the provincial level, since adequate measures of 

provincial wealth and fiscal capacity are available. Appropriate measures for 

targeting of equalization funds within provinces will required the development of 

these better measures. 

b. The targeting mechanism now in use for the student loan scheme may be a 

workable approach to developing such a measure. Eligibility for the student loan 

depends in part on family income, requiring students to report this income as part 

of their application. For students in secondary schools, the teachers and other 

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school staff who are usually familiar with the student's families school staff can 

review this eligibility information. 19 So the proportion of relatively poor children 

in each secondary school could be determined from the loan scheme application 

information. Presumably the same kind of income reporting could be instituted at 

the primary level as well for the purposes of equalization targeting. 

c. However, this does raise several important concerns about the use of selfreported 

household income for financial allocations. The first is the uncertain 

validity of the income information already collected under the loan scheme 

procedures. There is certainly an incentive for individual students or families to 

underestimate their true income, in order to qualify for the loan, which could lead 

to biases in the overall school measures. Moreover, the money income of families 

in rural areas or those heavily engaged in the informal economy may itself be a 

poor indicator of total income or wealth, since income in kind may be substantial. 

Therefore it would be necessary to do some field studies to verify the data already 

collected under the loan scheme procedures. Only a relatively small sample of 

students and families would be necessary for such studies to establish the validity 

of existing data. A second concern arises if the proportion of poor students were to 

be used for allocations to the schools as well, the possibility of over-estimates of 

poverty increases. It would be necessary to further verify the accuracy of the 

school staff’s reviews of individual student income reports. A system for 

provincial-level verification of such poverty levels would be necessary. In 

addition, the family income or wealth measures are not in themselves adequate 

indicators of a locality's overall financial capacity. Some localities may have 

substantial property owned by business and industry that would be available for 

generating local tax revenue, even if average household incomes are low. 

Therefore a more comprehensive indicator of local financial capacity is needed. 

Since the value of real property is part of the local tax base it could be included in 

a local financial capacity measure, if there is confidence in the accuracy and 

comparability of assessment practices. If important financial allocations are to be 

indexed in part to local real property values, some attention would be necessary to 

adjusting assessed values for variations in local assessment practices. Methods for 

doing so are common in countries in which real property taxes are a significant 

portion of local government finances. 20 

3.2.5 Finance Allocations for Private Schools 

a. The provisions for the private school system should be consistent with the 

overall goals of the financing system, and at the same time recognize the unique 

characteristics of the private sector. In this sense, the finance scheme should 

promote equity and efficiency, while maintaining the option of access to private 

schools as part of the overall educational system. To meet these objectives, the 

finance provisions for the private schools should encourage maintaining 

organizational diversity, mobilizing private resources, and options for 

19 These loan scheme procedures are described in detail in the report on that program. 

20 For example, in some jurisdictions assessed values are compared to a sample of actual market 

transactions in which property changes hands. The ratio of assessed value to market value in this sample is 

then used to adjust the overall assessed values for the local area. 

102



experimentation and innovation. To meet these objectives, the private educational 

sector should be relatively free of the framework of rules and regulations that 

apply to the government schools, but at the same time be held to high standards of 

integrity and performance. Consequently, a separate finance scheme is required. 

b. The main rationale for a separate finance system for private schools rests on the 

private nature of this sector, and the particular history of private education 

development in Thailand. In any educational system, private schools emerge and 

function in part to provide parents and educators greater autonomy in how they 

operate a school. This autonomy extends typically to deciding who may attend, 

what tuition and fees to charge, and what kinds of curriculum to offer. To provide 

too much control and subsidy turns the private schools into little more than 

government schools and discourages private investment. To provide too little 

subsidy denies the interest of the government in supporting education, and too 

little control invites schooling that can work against the policies of the 

government and the best interests of the nation. The finance approach 

recommended here is designed to strike a balance between these two undesirable 

extremes. 

c. The approach also would result in a change in the historical structure of private 

basic education. This structure is atypical of private education in other countries, 

which tends to serve mostly higher income families and emphasizes academic 

prestige. Within basic education in Thailand, by contrast, there have emerged 

other types of private schools. There is, of course, an echelon of high prestige, 

elite private schools, as in other countries. They are characterized by high 

selectivity, high tuition fees, and high expenditure per pupil. They receive most of 

their revenues from private sources, tuition, and donations, but may receive a 

government subsidy. These schools tend to be in urban areas. The second type of 

private schools, most of which fall under the Office of the Private Education 

Commission (OPEC), tend to be found in rural areas, serve lower income 

students, are less selective, and have lower expenditure per pupil (see Table ? 

above and the related discussion). These schools receive a government subsidy 

and are subject to more regulation. Some of these are referred to as "second choice 

schools" because they serve children who could not be admitted to more 

prestigious schools. There are also so-called private owner schools that are 

operated as proprietary businesses, and do not receive government subsidies. 

These are also often "second choice schools," which parents find more convenient 

or otherwise preferable to a low prestige ONPEC or government school. Quality 

control for the high prestige schools is essentially the responsibility of 

administrators and high status board members. OPEC schools are supervised by 

the Commission and are subject to its regulations. Private owner schools are 

largely outside the regulatory framework. 

d. Given this diverse context, the best way to meet the basic objective for the 

finance system is to provide subsidies through two mechanisms: equal perstudent 

subsidies to all recognized private schools, at a lower level than for the 

government schools, coupled with income-indexed scholarships to maintain 

equity and access to private education for students from low income families. To 

qualify for the subsidy, or to enroll scholarship students, the school would have to 

103



be registered by the OPEC. This would be the primary government quality control 

mechanism. Registration would be for five year, renewable periods, and can be 

revoked at any time for cause, the details of which would be spelled out in 

legislation and regulations. The size of the subsidy would be set at 35 per cent of 

the per-student subsidy amount for the government schools, with an amount equal 

to an additional 35 per cent of the per-student government subsidy as a fund for 

scholarships to students from low-income families. Under such a scheme, 

registered schools would receive some government support. Those schools 

enrolling higher proportions of poor students would receive higher support, 

improving the educational opportunities for those children. The private schools 

would continue to depend on private resources to finance the full program, thus 

maintaining incentives for mobilizing these resources for education. 

e. At the implementation of such a policy, all existing OPEC and non-proprietary 

schools would receive an initial registration without review, in order to maintain 

operations. All private owner schools would receive a provisional one-year 

registration, which must be reviewed and transferred to a regular five-year 

registration within the first year. Any private owner schools which cold not meet 

the registration conditions would be removed from government subsidy at the end 

of the first year. 

3.3. Higher education financing 

3.3.1 Level of subsidy 

a. The overall subsidy of higher education should be reduced. The current subsidy 

ratio of over 90 per cent of the direct costs of higher education cannot be defended 

on either efficiency or equity grounds. The main issues for reform are the 

appropriate level of subsidy to use as a policy goal, and a mechanism for ensuring 

equitable access to higher education for poor students in a system with higher fees 

and expenses for individual students and families. The typical system for the 

financing of higher education consists of subsidies to institutions, loans and 

subsidies to students, and substantial private expenditure on direct and indirect 

costs of education. Reasonably current estimates of the ratios of subsidies to 

private costs of higher education for neighboring countries are not available for 

comparative purposes. However estimates from OECD countries are available, for 

both centralized and decentralized systems. For the mostly decentralized OECD 

countries 21 , the public expenditure on higher education is approximately twothirds 

of the total. For the same countries, as well as the mostly centralized 

countries 22 , the ratio of expenditure on higher education relative to lower 

education is less approximately 2:1. This latter proportion reflects much higher 

participation rates of upper secondary education in the OECD countries than in 

Thailand. So a somewhat higher ratio may be a more reasonable short-range goal. 

Overall, however, these levels of support and subsidy seem like reasonable 

longer-term policy goals for Thailand. 

21 These countries are Australia, Canada, Germany, Japan, Switzerland, U.K. and U.S. (OECD Indicators, 

1997). 

22 These countries are Austria, Belgium, France, Ireland, Italy, Luxembourg, Netherlands, and Portugal. 

(OECD Indicators, 1997) 

104



b. Achieving such policy goals would mean very substantial shifts in the overall 

funding of higher education, with large increases of direct and indirect costs being 

borne by students and families. However, it is very difficult to estimate the actual 

amount of increase in fees and costs that would result. This is because there is 

likely to be considerable opportunity for increased efficiencies in the operations of 

higher education institutions. But it is quite likely that the costs to students and 

families for higher education could increase by a factor of five or more. Such 

higher fees would effectively bar poor students from higher education and place a 

much greater burden on middle income families. Therefore a substantial 

expansion of income-based financial aid should be made available to students. 

This is could be based on an expansion and further development of the student 

loan scheme discussed in a separate report (cite here when available). 

Scholarships for able poor students should also be developed. 

c. In addition, it would be necessary to phase in the shift of costs under this 

recommendation. The most direct way would be for the Government of Thailand 

to simply reduce the per-student subsidy by a fixed amount over a 5-10 year 

period. The soon-to-be-autonomous institutions could then design their own 

responses to the shifting financial burdens. They could reduce the necessity for 

precipitous increases in fees by instituting efficiency measures, raising private 

funds, as is common in most countries, and providing financial aid to students 

from local revenues. 

d. The issue of an appropriate subsidy level for higher education was discussed at 

length during a Policy Workshop on Educational Finance Reform Proposals in 

Thailand organized at the Rose Garden, Nakorn Pathom on 5-6 March 1999. A 

number of participants justified the high subsidy levels as necessary investments 

to accomplish the recent expansion of participation in higher education. This is 

reflected in the high levels of capital expenditure in recent higher education 

budgets. 

3.3.2 Cost recovery and private contributions 

The high levels of subsidy for higher education represent an apparently inefficient 

and inequitable use of resources. The arrangements for the financing of higher 

education should be shifted to depend on greater private contributions to the cost 

of the programs, and mechanisms for cost recovery wherever feasible. The high 

rate of private returns to higher education suggests that the government should 

limit subsidies to a much smaller proportion of the total cost of education. Subsidy 

rates in the range of one-third to two thirds of the programmatic costs of higher 

education would be in line with the policies in many developed and some 

developing countries. For the non-programmatic costs (room, board, incidentals), 

subsidy rates should be much lower or eliminated. This would require large 

increases in tuition rates and other sources of revenue to replace the reduced 

government subsidies. These large changes in policy have major impacts on 

students and families and cannot be introduced rapidly. A program of phased 

increases in tuition and fees would be necessary to reduce the dislocations or 

resistance resulting from rapid increases. In addition, maintaining access for lowincome 

students would require increases in financial aid through grants and loans. 

105



The existing loan and scholarship programs are functional and could be increased 

to maintain educational opportunity for lower income students. 

3.3.3 Administration of financial autonomy 

The current systems for budgeting and accounting in higher education institutions 

are not designed for autonomous management. If the individual campuses are to 

make best use of their financial authority, they will need a financial information 

system to support decision-making. Such systems should be based on the same 

sort of uniform accounting structure and generally accepted accounting practices 

as are developed for the local education authorities. However, the systems should 

also be adaptable to the needs of the various sized and types of higher education 

institutions in Thailand. This is in part a relatively straightforward technical 

problem that could be solved through use of existing computer systems and 

software designed for higher education and government agencies, and adapted to 

the Thai context. However, it is also in greater part a human resource and 

organization problem. The institutions will need to develop the organizational 

structures and human resources to engage in effective financial management in the 

new environment. This will require training of administrators and faculty, and the 

development of new internal organizational structures and procedures for financial 

decision making and planning. These concerns should be part of the overall 

implementation plans for financial reforms. 

3.4. Implementation issues 

3.4.1 Transparency and allocation policy deliberations 

There are advantages in terms of transparency to be found in a budget allocation 

system that relies on clear and simple formulas and standards as the bases for 

distribution. The system described here uses formulas and standard amounts as 

that basis. Therefore the policy dialog on educational resource allocation can 

focus on these formulas and standards as the main content of policy. The basis for 

decisions is open to review and encourages the participation of relevant 

stakeholders in the deliberative processes. This improves transparency and can 

solidify support for policies so derived. Similarly, allocation policies can be 

adjusted readily to achieve the desired policy objectives, in terms of equity, access 

to resources, etc. 

3.4.2. Alternative finance system structure: charter school service areas 

a. The finance scheme described above is based on an assumption of relatively 

low levels of local administrative autonomy and readiness to assume fiscal 

responsibility for schools. Therefore the general finance policy mechanisms 

described above provide a means of financing basic education throughout the 

country, and as such are the default policy for all areas. However, a finance 

system can also allow for alternative financial and governance arrangements for 

areas that do not fit the assumptions for the country as a whole. There may be 

areas of Thailand where there is both readiness and desire for alternative systems 

with greater local control. Therefore the overall finance system should contain 

provisions that allow for such variation. 

106



b. The system proposed here, based on the concept of Charter School Service 

Areas, is such a provision. This new policy would provide a mechanism through 

which local governments could create alternative finance and administrative 

mechanisms that better fit local conditions. That mechanism would require new 

legislation allowing for the creation of a new kind of government unit for 

providing basic education: a charter school service area. This would be 

accomplished by allowing the local residents to develop a charter as a legal 

document, defining a new special government unit to provide school services. The 

charter would describe the means for finance and governance of the area, 

including taxation and decision making processes. This charter, if ratified by the 

provincial and central government, would then supersede the standard finance and 

administrative arrangements for that area. For example, if a collection of, say, 

three sub-district administrative units wanted to combine their resources to 

provide a new secondary school, they might develop a charter to define a charter 

school service area composed of the three sub-districts. The new unit would then 

have the authority to raise tax revenues, construct new facilities, and operate its 

own schools. Thus such a policy mechanism could encourage local initiative, 

creativity, and adaptation to local needs and circumstances. Since the concept of 

school charters is already established and encouraged in many schools, the 

foundation for success of such an approach has already been established. 

3.4.3 Province as fiscal agent 

a. The proper administration of block grants and local school budgets will require 

changes in the financial management arrangements at the provincial and local 

levels. The financial management responsibilities will increase significantly at the 

level of the local educational authorities, since they will have full budget 

discretion over their block grant allocations. It is not reasonable to assume that all 

these local schools and administrators will initially have the necessary tools or 

skills for these added responsibilities. Therefore a two-part approach is 

recommended. The first should be a program of training and management support 

for local school administrators. The second recommendation is to make the 

provincial education office (or in large districts the district education office) the 

fiscal agent of the local education authority (LEA). The block grant would 

represent a fixed amount of spending authority for each LEA, but the funds would 

actually reside in an account at the provincial level. The LEA would then prepare 

a budget and send it to the provincial financial office, not for approval, but for 

recording without modification as the basis for expenditures. Actual 

disbursements would then be made from the block grant account according to 

purchase orders or other authorization (such as for salaries) from the LEA. The 

provincial finance office would provide regular (e.g., monthly) reports to each 

LEA for their management uses. LEA's could shift funds within their spending 

authority as necessary. They could also maintain small cash accounts for petty 

expenditures at the local level. Through such a system, a relatively modest 

investment in accounting systems and management staff at the provincial (or 

district) level would support full budget discretion for LEA's, while maintaining 

good accounting and financial management practices. 

107



b. This degree of centralized transaction processing would also improve the financial 

information resources generally. The accounting and disbursement systems would be 

based on standardized accounting definitions and practices. The storage of this detailed 

accounting information in relatively few locations would also make auditing much more 

efficient. In addition, these provincial accounting databases would provide the raw data 

for regular and accurate expenditure statistics for overall management and policy reviews 

at the provincial and national levels. 

3.5. Information Systems and Resources 

3.5.1 Horizontal Centralization and Information Policy 

a. Many of the information problems arise from a way of organizing and storing data that 

reflect two administrative problems. The first is the lack of ability to coordinate and 

control a horizontally decentralized structure. That is, the controls of the elements of the 

educational system are highly centralized with respect to the levels of the system (school, 

district, province, etc.). But they are decentralized across functions and programs. This 

decentralization at the top of the system is reflected in the number of separate agencies 

that operate and control schools of the same basic type, as shown in Table 16 below. 

Table 16 - Agencies and jurisdiction for operation of schools 

Type of School 

MOE 

or Program Level ONPEC DGE DVE RIC RIT DPE DFA OPEC MUA MOI BMA Private 

General Pre-Primary X X X X X X X 

Primary X X X X X X X X 

Lower Sec, X X X X X X X X 

Upper Sec. X X X X X X X 

Special Educ. Primary X X X X X X 

Secondary X X ? 

Vocational Certificate X X X X X X 

Dipl. Voc. Ed. X X X X X X 

Dipl. Tech 

X X X X X X 

Ed. 

Teacher Educ. X X X X X X 

General Higher Certificate X X 

Diploma X X X X X X 

BA and above X X X X X X 

NOTE: Programs under Ministries of Public Health, Defense, and Transportation omitted due to small numbers of students 

BMA 

DFA 

DGE 

DPE 

DVE 

MOE 

MOI 

MUA 

ONPEC 

OPEC 

RIC 

RIT 

Bangkok Municipal Administration 

Department of Fine Arts 

Department of General Education 

Department of Physical Education 

Department of Vocational Education 



Ministry of University Affairs 

Office of the National Primary Education Commission 

Office of the Private Education Commission 

Rajabhat Institute Council 

Rajamangala Institutes of Technology 

108



b. The result of this structure, for example, is that as many as eight different 

agencies may operate lower secondary programs, only four of which are under the 

Ministry of Education. The information on budgets, staff, and enrollments is 

organized around the specific administrative processes and control needs of the 

separate agencies. It is therefore not routinely or directly possible to assemble data 

about lower secondary education overall. The same is true of other levels and 

types of programs as well. As a result, there is a misalignment between the policy 

level of decision and analysis, which is concerned with broad program areas, and 

the administrative level, which is concerned with control, accounting, and 

assessment only within it’s area of operation. There is also misalignment between 

the information flows and the policy goals of the system. Information flows and 

structures reflect maintenance and support of institutional structures and 

processes; therefore describing how things work within the institutional structure 

is comparatively easy and accurate. However to examine the impacts of the 

education system or of policy decisions vis a vis goals or the client environment, 

it is much more problematic. The goal of information system reform should be to 

get the information structures and flows better designed to serve larger policy 

goals and management issues. 

c. The second administrative problem is lack of policy or administrative 

mechanisms to control and coordinate information resources. In short, there is no 

information resource management structure for the whole of education. There are 

substantial information resources in the educational system. And many individual 

agencies have done an excellent job of developing their own internal management 

and analytical capability. The details of much of this development are discussed in 

considerable detail in the Information Systems report in Appendix 1. However, 

much of this development has taken place under the initiative of the separate 

agencies, without an overall strategy or integrating authority. Thus the quality of 

the resources within individual agencies does not contribute to solving the overall 

problem of disintegrated information resources. It would appear that the ONEC is 

in the position and has the potential resources to take on such a role. But the 

policy structure and operational authority for the ONEC (or any other agency) to 

engage in coordination and management of information resources do not exist. 

d. There has been some progress in that direction, as reflected in the OECD pilot 

project, which brings together data from many sources to fit the OECD indicators 

framework. This is an excellent basis for further development and information 

coordination initiatives. To continue this work, the Government should undertake 

two major related initiatives. One is to formulate an educational information 

policy, which provides the basis for common approaches to definitions, standards, 

and management of information resources. The policy should include 

specification of authority in one agency for the coordination and planning 

functions. The same agency should have primary responsibility for educational 

statistics structures, standards, reporting, and analysis. The second initiative is for 

the Government to develop and institutionalize its capacity to generate educational 

indicators routinely; develop Executive Information Systems for managers and 

policy makers, and develop the capacity for data mining, and more extensive 

electronic networking for the collection and dissemination of educational data. 

109



3.5.2. Development and implementation strategies 

a. The success of the reforms recommended here will depend in large part on the 

efforts and abilities of educators and other officials at the provincial, district, and 

LEA levels. They will be called upon to work in new ways, solve new problems, 

and apply new skills and techniques. They will need training and support to 

succeed. This need suggests three strategies for training and human resource 

issues. For the financial recommendations, the primary actors will be 

administrators so they are the main focus of attention here. One strategy is to 

assess the existing skills and abilities of these administrators. Our field visits 

revealed a number of school principals with high levels of skill and welldeveloped 

systems for budget management and decision making. A training 

strategy should build in these strengths, and include identification of those areas 

and issues in need of greatest investment. A survey of administrators and focus 

group sessions in various regions could reveal the high priority areas in need of 

attention. Administrator organizations should be involved in these assessment 

activities to make best use of their expertise, and to ensure that the effort is not 

seen as an evaluation of individuals. 

b. A second strategy would include gradual introduction of the new budget 

processes and administrative procedures in pilot projects for testing and 

adjustment. The pilot projects should be located in mix of provinces, some of 

which with relatively well developed central and local capacities and others with 

less. This would allow for an exploration of the full range of problems likely to be 

encountered as implementation is expanded throughout the country. Experience in 

these pilot projects would provide useful experience in identifying the training and 

support needs of administrators at each level. 

3.5.3. Decentralization and budget control: the need for flexibility and quality 

control 

Schools cannot be responsive to reform initiatives from the central Government, 

or to consumer preferences if they are tightly constrained by rules and budget 

regulations. Existing line-item control of budgets from the central level of 

Government seems far too restrictive. The main reasons for this kind of control, 

quality assurance and avoidance of corruption, can be achieved by other, less 

intrusive means. The mechanisms are in place already for effective reporting of 

school budgets and auditing of school expenditures. Review of these information 

sources by local and higher-level government officials can assure that resources 

are being properly used. School officials can be more responsible for budget 

decisions as long as the mechanisms for accountability are in place as well. The 

central level is concerned as well with total expenditure and controlling 

obligations for subsidies to the provinces and school levels. However, these 

controls can be exercised at the aggregate level, and maintain overall national 

spending policies without intruding in the local level resource allocation 

mechanisms. Therefore the budget system at the national level should be 

concerned primarily with the aggregate levels of support for education. The 

existing mechanisms for reporting and auditing of schools budgets should be 

improved and made subject to assessment and monitoring by the Central 

Government. 

110



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Appendix 1 

Examination of the Capacity of the Information System 

Purpose of the Study 

Report prepared by Dr. Snong Lohitwisas 

This study examines the existing information systems for financial planning, 

managing and administering educational programs for the Government. The work is part 

of the educational finance review component of the Technical Assistance activities 

conducted under the Asian Development Bank Social Sector Loan Program (ADBSSL). 

The purpose of this part of the review is to assess the system’s capacity to support and 

facilitate effective decision making and management in general, and in relation to the 

recommendations of the finance review. The assessment includes the capacity of the 

information system to support improved monitoring. The study describes the existing 

content and organization of current financial information systems, databases, and flow of 

financial information through various levels and units of educational system. It reviews 

the information system’s capacity and effectiveness, adequacy of computer systems and 

network infrastructure available for financial information at various levels, and identifies 

gaps and information needs for financial analysis and decision making. 

Relationship to the Finance Review 

The finance review, of which this study is a major part, is one of four technical 

assistance components under the ADBSSL. The finance review component examines 

public resources and expenditure for education, private expenditure on public schooling 

and private sector outlays on the private school system. The review includes 

recommendations and an action plan for improved resource allocation. The new 

constitution requires the government to provide 12-year free basic education and at the 

same time the national education budget has been cut and limited as a result of financial 

crisis of the country. It is therefore necessary to develop new mechanisms for identifying 

priority program expenditures and reforming the overall finance system support the 

qualitative and quantitative expansion of education. 

Because the review is intended to assist in responses to the financial crisis, the 

work is focused on crisis-related issues. These include the equity of public financial 

resource allocation for schooling as well as the efficiency of resource use. Equity and 

adequacy in the distribution of financial resources across the most relevant regions or 

student groups are taken into consideration. 

To achieve the goals of the finance system reforms and finance review 

recommendations an adequate finance information system is necessary. Such a 

management information system is needed to provide data that assists an organization in 

understanding daily operations in terms of both long-term and short-term goals. In 

general, any processed data that can assist organization in planning, managing, analyzing 

its activities and making decision can be management information. The specific finance 

information needs may vary from organization to organization, depending on its particular 

114

mission and operations. The term “system” is not restricted to electronic or computer 

systems, but includes all the forms of media and communication that make financial and 

management information available to managers and policy makers. Financial education 

management and policy making involves the interaction of information authority, and a 

vision of organization. Educational information must be appropriate to the decisionmaking 

authority of educational policy makers and planners and relevant to the explicit 

and implicit goals they seek to achieve. In order to determine the capacity of the 

information system, characteristics of the appropriateness of the system should be 

identified are relevance, accuracy, timeliness, and sufficiency for decision making at 

various levels. 

Data Collection and Data Analysis 

The Government organizations directly responsible for providing basic education 

information and related policy decision organizations were included in the study. It was 

assumed that individual higher education institutions having information system capable 

of supporting their educational management operations were not included in the study. 

The organizations in the study were as follows: 

OPS: Office of Permanent Secretary, Ministry of Education 

EMISC: Educational Management Information System Center, OPS, Ministry of 

Education 

DGE: Department of General Education, Ministry of Education 

DOF: Department of Fine Arts, Ministry of Education 

DOPE: Department of Physical Education, Ministry of Education 

DOVE: Department of Vocational Education, Ministry of Education 

DNFE: Department of Non-formal Education, Ministry of Education 

ONPEC: Office of National Primary Education Commission, Ministry of Education 

OPEC: Office of Private Education Commission, Ministry of Education 

RIT: Rajamangala Institute of Technology, Ministry of Education 

ORIC: Rajabhat Institutes, Ministry of Education 

BLEA: The Bureau of Local Education Administration, Dept. of Local Administration, 


BMA: Bangkok Metropolitan Administration, Ministry of Interior 

The data for this study were collected through document analysis and unstructured 

interviewing of responsible personnel in budget section, information section, budget 

follow-up, and finance administration sections. Document in any form of data reporting, 

annual statistical reports, and other related forms were collected during August and 

September 1998. Both formal and informal unstructured interviews were undertaken in 

September and October, 1998. The qualitative data analysis was used to describe the 

examination of the capacity of the information system resources, decision needs, 

capacities, computer system infrastructure and future trends to support improved 

monitoring system of each department and to summarize the overall picture of all 

organizations. 

The preliminary analysis results reported here provide the following descriptions of each 

organization and the overall basic education system: 

115

1. Description of content of current financial information systems and data bases. 

2. Description and assessment of computer systems and network infrastructure available 

for financial information at various levels. 

3. Description of flows of financial information through various levels and units of 

educational system. 

4. Description of content of current or related data bases on educational resources 

(teachers, facilities, etc) if data bases exist in current form. 

5. Assessment of information system capacity and effectiveness. 

6. Analysis of gaps and information needs for finance analysis and decision making. 

Description of content of current financial information systems and databases. 

In general, the Finance Division of each organization consists of 4 sections: 

budget administration, accounting, finance, and procurement. The Finance Division 

works closely with the budget section under Planning Division. The budget section 

controls the budget approved by the BOB and the finance division administrates budget 

according to the allocation plans and finance regulations controlled by the Comptroller 

Office, Ministry of Finance. 

The execution of budget follows 5 steps: 

1. The organization requests for four monthly budget. 

2. The BOB considers the request and approves the budget. 

3. The organization requests for a permit to pay certain amount of budget. 

4. The comptroller office considers and approves for a permit. 

5. The organization processes to disburse actual expenditure. 

The financial database shown at the Comptroller Office year 1996-1998 consists 

of budget amounts organized in three categories: cumulative amount of approved budget, 

the retained amount (or carry forward), and the actual expenditure. The amounts are 

classified by organization, finance location, accounting code, and types of expenditure. 

Most organizations are required to report budget execution classified by plans and types 

of expenditure. 

The interviews revealed that most organizations have had difficulties on collecting 

financial data from local areas. They seldom have sufficient data to assess expenditures 

and administration of local areas. One division on OPEC, working on subsidy for private 

schools, is seriously sort of personnel to take care of all operation details. In their manual 

operating system, they can not produce sufficient information for their planning and 

management. There appears to be no alternative solution except bringing computers with 

efficient software to manage and help them handle all paper work more automatically. It 

was reported that OPEC is developing the system software and computer networking for 

all organizations at the central Ministry so the management of financial system for private 

education can be improved. 

116

The information requirements for financial planning and budget making are 

increasing. In the process of defending budget requests for 1998, all organizations were 

required for the first time to submit the summary report of expenditure classified by plans 

and categories for fiscal year 1997 and 1998. These reports were submitted to the 

Parliament Budget Scrutinizing Commission for comparatively analyzing previous 

expenditure to the new budget request. 

The detail of current financial information in organizations can be described as the 

following Table 1. 

117

Table 1: Description of content of current financial information systems databases, data processing, software and hardware 

Dept. Flow of 

Report 

Reporting forms Reporting 

Date 

Content of financial information 

Software 

at central 

Hardware 

at central 

OPS Dept. to OPS A report of 

budget execution 

DGE Province to Four-month 

Finance Div report. 

DOPE 

DOVE 

Institution/ 

School to 

Dept. 

Institution to 

Planning 

Division 

4monthly 

Monthly report of Monthly 

expenditure. 

A monthly report 

of expenditure. 


of expenditure on 

utilities. 


of non-budget 

receiving and 

expenditure. 

PDOVE 5/1 


of budget 

execution 

classified by 

types of 

expenditure. 

PDOVE 5/2 


of budget 

execution 

classified by 

plans and tasks. 

PDOVE 5/3 

A statistical 

expenditure 

report. 

PDOVE 5/4 

A report of carry 

forward. 

Monthly 

Starting fiscal 

year 1998 

Monthly 

Starting fiscal 

year 1998 

Monthly 

Monthly 

Monthly 

Sum of four monthly expenditure of 

plans and tasks classified by 

supplement, carry forward, 

disbursement, and types. 

Expenditure classified by plans and 

tasks, category of expenditure. 

Monthly expenditure amount classified 

by 7 types of expenditure, budget 

allocation, disbursement, percent of 

used budget, current plan, and balance. 

Monthly expenditure on utilities 

classified by types, and units. 

Amount of non-budget receiving and 

payment classified by types: tuition, 

accumulation from previous project 

and others. 

Monthly expenditure classified by 

types, budget allocated, four monthly 

budget approved and transferred both 

accumulation and current, four 

monthly expenditure disbursement 

both accumulation and current, balance 

of budget, amount of carry forward. 

Four monthly expenditure 

disbursement classified by types, 

current month, accumulate balance, 

and total amount. 

4 monthly Total amount of four monthly 

expenditure disbursement classified by 

types, items, and month. 

4 monthly Expenditure of carry forward classified 

by fiscal years, types, items, period of 

payment, amount paid, and balance. 

Data 

Processing 

at central 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

Stand alone 

PC 

Stand alone 

PC 

Stand alone 

PC 

Stand alone 

PC 

Stand alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Available Financial 

Information 

N/A or might be 

internal report.. 


internal report. use. 


internal report.. 


internal report. 





A summary of 

expending budget 

fiscal year 1998 

classified by plans, 

tasks, projects, and 

types. 

Four monthly 

summary of 

expenditure classified 

by institutions and 

expenditure categories. 

Summary of 

expenditure fiscal year 

1998 classified by 

plans and projects. 

and expenditure 

categories reported by 

individual division to 

planning section. 

118

Table 1: Continued 

Dept. Flow of 

Report 

Reporting forms 

DNFE 

Province to 

Finance 

Division 

PDOVE 5/5 

A planning report 

of four monthly 

budget request and 

approved. 

PDOVE 5/6 

A report of budget 

execution on 

equipment and 

assets. 

PDOVE 5/7 

A report on results 

of equipment and 

asset acquisition. 

PDOVE 5/8 

A report of 

acquisition on 

properties, land and 

construction. 

PDOVE 5/9 

A report on results 

of properties, land 

and construction. 


of tuition and fee. 

A statistical report 

of tuition. 

Expenditure of 

tuition on equip., 

properties, and 

construction. 

Reporting 

Date 

Content of financial information 

4 monthly Plan to request for four monthly budget 

and approved budget classified by types 

and four-month period. 

4 monthly Report of procedures to purchase 

equipment and properties according to 

procurement regulation classified by 

items, approved budget. 

4 monthly Results of equipment acquisition 

classified by items, plans and tasks, 

number of units, approved budget, 

procedure of contract, contract date, 

types o f acquisition, amount of the 

contract, delivery date, and name of 

vendors. 

4 monthly Report of procedures to acquire 

properties and construction according to 

procurement regulation classified by 

items, approved budget, types and steps 

of procurement procedure, expenditure 

disbursement and number of units, and 

balance. 

Monthly 

Monthly 

Monthly 

Results of properties and construction 

acquisition classified by 

items/plans/tasks/projects, approved 

budget, types and steps of procurement 

procedure, steps of procurement, 

contract date, types of procurement, 

contract price, delivery date, and name 

of vendors. 

Expenditure of tuition classified by 

types and plans, and balance. 

Expenditure of tuition classified by 

months, types, and items, previous 

balance, and total. 

Expenditure of tuition on equipment, 

land/properties, and construction 

classified by items, number of units, 

purchase price, and tax deduction. 

119 

Data 


at central 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Computerizatio 

n of Financial 

and all 

divisions 

at the Ministry, 

except manual 

entry data from 

province. 

Software 

at central 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

Application 

software on 

4GL 

RDBMS. 

Provinces and 

NFE centers 

use MS Excel 

to report data. 

Hardware 

at central 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

Stand-alone 

PC 

PC LAN 

LINUX 

Unix OS 

and 

ODBC for 

Client- 

Server on 

Windows 


Information 

Summary of 

expenditure of tuition 

fiscal year 1998 

classified by 

educational 

institutions, 

expenditure categories, 

previous and current 

balance. 

Online financial 

information databases 

both for routine 

operation and for high 

administrators at 

Central Ministry.


Dept. Flow of 

Report 

ONPEC Province to 

Follow-up 

and 

Evaluation 

Section, 


Division 

OPEC Division/ 

Centers to 

OPEC 

RIT 

Division/ 

Centers to 

OPEC 

District to 

OPEC 


OPEC 



Division 

Reporting forms Reporting Date Content of financial information Data 


at central 

A manual of 

using program to 

report budget 

execution, fiscal 

year 1997. 

A report of 

subsidy allocated 

to provincial 

private schools. 

Monthly report of 

subsidy to 

schools. 

3-month 

summary on 

subsidy to 

schools. 

A 3-month 

summary on 

subsidy to 

schools by 

province. 


on expenditure. 

Monthly report 

on the 15 th of 

the June, July, 

Aug, Sept, and 

Oct. 

Monthly 

Monthly 

Starting 1998 

3-monthly 

Report on the 

10 th of the 

following 

month 

A provincial report expenditure of 

equipment, properties, and 

construction classified by plans, 

tasks, projects, and items. 

Database of allocation and approved 

budget, and actual expenditure. 

Sum of subsidy expenditure given to 

provincial private schools classified 

by approved budget transferred, 

balance from previous month, 

current payment, and balance. 

Subsidy paid to schools classified by 

schools, and balance. 

3-month summary of expenditure 

disbursement and allocated budget 

by month and # of schools. 

Expenditure disbursement and 

allocated budget classified by 3- 

month, # of schools, and balance. 

Expenditure classified by budget, 

non-budget, central budget, and 

types of expenditure. 

Input data 

through 

application 

software 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Manual Data 

Entry 

Software 

at central 

Application 

Software 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

Hardware 

at central 

PC LAN 

stand alone 

PC 

compatible 

Stand alone 

PC 

compatible 

Stand alone 

PC 

compatible 

Stand alone 

PC 

Compatible 

Stand alone 

PC 

Compatible 


Information 

1. budget admin., 

2. accounting 

management, 

3. finance mgmt. 

4. procurement 

management, 

Provincial report of 

budget classified by 

allocation, approval, 

carry forward, 

expenditure balance, 

plans, tasks, projects, 

and items. 

N/A or might be internal 

report. use. 


report. use. 


report. use. 


report. use. 

A summary of 4 month 

report on budget 

allocated requested, 

approved, expenditure, 

and balance classified by 

plans and categories. 

120


Dept. Flow of 

Report 

Reporting forms. Reporting Date Content of financial information Data 


at central 

ORIC 



Division, 

ORIC 


of non-budget. 


of non-budget 

expenditure. 

A manual of data 

entry of 

expenditure fiscal 

year 1997. 

BMA DOE to BMA Monthly budget 

execution. 

Monthly 

Monthly 

On the 5 th of the 

following 

month 

Monthly 

Non-budget classified by previous 

and current receiving and expense, 

saving at dept., cash, saving at bank, 

saving at finance province. 

Monthly non-budget expenditure 

classified by categories and plans. 

Data entry and report of allocation 

budget and expenditure classified by 

plans and types. 

Monthly expenditure by, allocation 

and approved budget, and 

disbursement. 

Manual Data 

Entry 

Input data 

through 

application 

software 

Input data from 

application 

software 

Manual Data 

Entry 

Software 

at central 

MS Excel 

PC and LAN 

Application 

Software 

PC and LAN 

Application 

Software 

MS Excel 

Hardware 

at central 

Stand alone 

PC 

Compatible 

PC LAN 

PC LAN 

Stand-alone 

PC 


Information 

Four monthly report of 

expenditure classified by 

plans and categories. 

Annual report of 


types and plans, categories 

and institutions, categories 

and faculties, projects. 


execution fiscal year 1997: 

allocation budget, actual 

expenditure, carry forward, 


plans. 


allocation and actual 


categories. 


execution: allocation 

budget, actual expenditure, 

percentage, carry forward, 


plans, categories and 

institutes. 


execution: actual 

expenditure disbursement 

including carry forward and 

balance classified by 

categories, plans, tasks, and 

projects. 

N/A or may be internal 

report. 

121


Dept. Flow of 

Report 

BLEA 

School to 

DOE 


BLEA 

Provincial 

Municipal to 

BLEA 

Reporting forms Reporting Date Content of financial information Data 


at central 

An experimental 

report of budget 

A monthly 

request report of 

budget 

A report of result 

to purchase 

equipment in 

education fiscal 

year 1997. 

A report of 

construction and 

buildings fiscal 

year 1997. 


of budget for 

teachers. 

Starting on July 

15, 1998 

Monthly 

Monthly expenditure classified by 

categories, allocation and approved 

budget, steps of procurement 

procedure. 

A request for subsidy budget by 

plans classified by allocation budget, 

expenditure, and items. 

A summary report of purchasing 

equipment classified by plans and 

tasks, amount of subsidy, date of 

contract, contract price, and 

expenditure. 

A summary report of construction 

classified by plans and tasks, amount 

of subsidy, amount of local subsidy, 

date of purchasing, contract date and 

price, and expenditure, and balance. 

Monthly expenditure for teachers’ 

welfare classified by items: such as 

medication for teachers and 

employees, and nos. of teachers. 

Manual Data 

Entry 

Manual 

processing 

Manual 


Manual 


Manual 


Software 

at central 

Hardware 

at central 


Information 

MS Excel N/A or may be internal 

use. 

MS Excel 

MS Excel 

MS Excel 

MS Excel 

PC Standalone 

PC Standalone 

PC Standalone 

PC Standalone 


use. 


use. 


use. 


use. 

122

Description and assessment of computer systems and network infrastructure available for 

financial information at various levels. 

From Table 1, the analysis of financial system includes computer systems at the central 

Ministry level. It seems that all central organizations have sufficient stand-alone PC computer 

to handle manual financial system, but there is a lack of networking financial application system 

software for administrating and managing routine workflow automatically. Some financial 

organizations do not have computer network infrastructure, for examples, OPEC, ONPEC, etc. 

Table 2 shows the number of offices, personnel, students classified by organizations at 

various levels in order to assess with the existing computer systems and network infrastructure 

available for financial information at all levels. 

Table 3 shows the existing computer system and network infrastructure available for 

financial information at various levels. The number of offices at each level indicates number of 

finance management system needed. In general, at national, regional, and provincial levels, 

there are sufficient stand-alone PC computers used to handle finance at the limited level 

comparing to the capacity of computer system technology available at this stage. DNFE and 

OPS have enough PC computer network and application software to manually manage finance 

system while ONPEC, OPEC, and DGE districts and schools do not have sufficient computers. 

123

Table 2: Number of offices, personnel, students at various levels classified by organizations year 1997. 

MOE MOI 

Content OPS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA Total 

National or Central Level 

Number of Offices 11 10 11 18 14 6 9 9 11 6 

Number of Personnel 665 724 852 674 689 404 341 287 n/a 

Number of Part Time Employees 116 208 34 60 n/a 

Regional Level n/a - - - - - - - 

Number of Offices 9 5 12 

Number of Personnel 9 311 69 

Number of Part Time Employees 170 2 

Provincial Level n/a - - - - 

Number of Offices 72 75 99 76 76 36 150 

Number of Personnel 3,579 376 1922 4,527 839 7,473 

Number of Part Time Employees add to 

5,593 

district 

District Level n/a - - - - - - - 

Number of Offices 780 855 860 50 

Number of Personnel 7,537 820 8,027 354 

Number of Part Time Employees 7222 N/A 243 

School or Institution Level - 

Number of Schools/Centers 12 413 11,983 31,279 6,278 36 429 489 

Number of Teachers 729 19,134 10,904 356,856 104,175 7,090 13,135 n/a 

Number of Part Time Employees n/a n/a 5,033 29,006 n/a 5,653 n/a n/a 

Number of Students 772,020 2,307,43 6,858,95 3,016,54 

376,061 267,136 330,123 

2 0 2 

Notes: - = not existing in the structure 

n/a = data not available 

124

Table 3: Existing computer systems and network infrastructure available for financial information at various levels 

Current existing contents MOE MOI 

EMISC OPS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 


Application s/w running on Unix, 

using RDBMS 

Budget administration testing no no no no no yes no no no no no no 

Finance system no no no no no no yes no no no no no no 

Accounting system no no no no no no yes no no no no no no 

Procurement system no no no no no no yes no no no no no no 

Application s/w running on pc LAN 

and Stand-alone PC such as FoxPro 

Budget administration system no yes no no no no no yes no no yes no no 

Finance system no yes no no no no no no no no yes no no 

Procurement information system no no no no no no no yes no no yes no no 

Package s/w such as MS Excel yes yes yes yes yes yes yes yes yes yes yes yes yes 

Servers: Mini Computer yes no no no no no no no no no no no no 

RISC yes no no no no yes yes no no yes yes no no 

PC computer yes yes yes no no yes yes yes yes yes yes no no 

Networking Operating System (NOS) 

Unix yes no no no no yes yes no no yes yes no no 

Windows NT yes yes yes no no yes yes no yes yes yes no no 

Netware no no yes no no no yes yes yes no yes no no 

Approx. nos. of computers working 

on finance (comparing to nos. 

divisions) 

Workstations testing 20 n/a n/a no - 15 - - - - - 

Stand-alone PC computers 1 - 15 n/a n/a 16 12 10 15 10 16 3 2 

Existing Network Infrastructure 

LAN yes yes yes n/a n/a yes yes no no yes yes no no 

Remote Access 

Dial-up-line yes yes yes n/a n/a yes yes yes yes yes yes no no 

X-25 no no yes no no no no yes no no no no no 

Thai-Pak no no no no no no no yes no no no no no 

Leased Line to MOE network yes yes yes yes yes yes yes yes yes yes yes yes yes 

Internet access yes yes yes yes yes yes yes yes yes yes yes yes yes 

Regional Level 

Application s/w running on PC LAN 

and Stand-alone PC such as fox pro 

125




Budget administration system no no - - - - no - - - - - - 

Procurement information system no no - - - - no - - - - - - 

Package s/w such as MS Excel yes yes - - - - yes - - - - yes yes 

Servers: RISC no no - - - - no - - - - - - 

PC computer yes yes - - - - yes - - - - - - 


Windows NT yes yes - - - - yes - - - - - - 

Netware no no - - - - yes - - - - - - 

Approx. nos. of computers in finance 

Workstations testing n/a - - - - - - - - - - - 

Stand-alone PC computers n/a n/a - - - - 10 - - - - - - 

Existing Network at office 

LAN n/a n/a - - - - yes - - - - - - 

Remote Access 

Dial-up-line yes n/a - - - - yes - - - - - - 

X-25 no no - - - - no - - - - - - 

Thai-Pak no no - - - - no - - - - - - 

Leased Line to MOE network no no - - - - no - - - - - - 

Internet access via ISP yes yes - - - - yes - - - - - - 

Provincial Level 

Application s/w running on pc LAN 

and Stand-alone PC such as fox pro 

Budget administration system no no no no no - 5% yes no - - no no 

Procurement information system no no no no no - 5% yes no - - no no 

Package s/w such as MS Excel yes yes yes yes yes - yes yes yes - - yes yes 

Servers: RISC no no no no no - yes no no - - no no 

PC computer no no no no no - yes some no - - no no 


Windows NT no no no no no - some no no - - no no 

Netware no no no no no - some some no - - no no 

Approx. nos. of computers working 

on finance 

Workstations n/a n/a n/a n/a n/a - no no n/a - - - - 

Stand-alone PC computers n/a n/a n/a n/a n/a - 76 76 n/a - - n/a n/a 

126





LAN some some some n/a n/a - some some no - - no no 

Remote Access 

Dial-up-line yes yes yes n/a n/a - yes yes yes - - no no 

X-25 no no yes - no - no yes no - - no no 

Thai-Pak no no no - no - no yes no - - no no 

Leased Line to MOE network no no no - no - no no no - - no no 

Internet access via ISP 20% 20% 20% - 20% - 20% 20% 20% - - 100% 20% 

District Level 

Application s/w running on LAN and 

Stand-alone PC such as fox pro 

Budget administration system no no - - - - no yes - - - no no 

Procurement information system no no - - - - no yes - - - no no 

Package s/w such as MS Excel yes yes - - - - yes yes - - - yes yes 

Servers: RISC no no - - - - no no - - - no no 

PC computer no some - - - - some yes - - - no no 


Windows NT yes no - - - - yes no - - - no no 

Netware no no - - - - yes yes - - - no no 

Approx. percentate of computers 

working on finance 

Workstations n/a n/a - - - - 10% no - - - - - 

Stand-alone PC computers 80% 80% - - - - 90% 50% - - - 80% 30% 


LAN 5% 5% - - - - yes no - - - no no 

Remote Access 

Dial-up-line yes yes - - - - yes yes - - - no no 

X-25 no no - - - - no yes - - - no no 

Thai-Pak no no - - - - no yes - - - no no 

Leased Line to MOE network no no - - - - no no - - - no no 

Internet access 20% 20% - - - - 20% 20% - - - 10% 5% 

School/Center/Institution Level 

Application s/w running on PC LAN 

and Stand-alone PC such as fox pro: 

Budget administration system - - no no no no no yes no no yes no no 

127




Procurement information system - - no no no no no yes no no yes no no 

Package s/w such as MS Excel - - yes yes yes yes yes yes yes yes yes yes yes 

Servers: RISC - - no no no yes yes no no yes yes no no 

PC computer - - yes no no yes yes yes yes yes yes no no 


Windows NT - - yes no no yes yes no yes yes yes no no 

Netware - - yes no no no yes yes yes no yes no no 

Approx. percentage of computers 

working on finance 

Workstations - - n/a n/a n/a - 15 - - - - - 

Stand-alone PC computers - - 75% n/a 100% 100% 100% 50% 40% 100% 100% 60% 40% 


LAN - - some n/a some yes some no no yes yes no no 

Remote Access 

Dial-up-line - - some n/a n/a yes yes some some yes yes no no 

X-25 - - no no no no no no no no no no no 

Thai-Pak - - no no no no no no no no no no no 

Leased Line to MOE network - - few no no no no no no no no no no 

Internet access - - 30% 20% 20% 25% 20% 20% 20% 20% 20% 10% 5% 

Notes: testing = being developed and tested 

yes = existing 

no = not existing 

- = not existing in the structure 


some = existing in some level, but can not be estimated. 

128

Description of flows of financial information through various levels and units of 

educational system 


From the bottom up line of administration, a district is responsible to collect and 

process data from schools and report to province, a province collects and processes data 

then reports to either region or directly to the central. The flows of financial information 

among divisions depends on the management of each organization. Most organizations 

manage to the financial information flows among planning, budget, policy, and 

information in the planing division and finance, budget, and accounting in the finance 

division involved in financial information. In addition, they have the accounting section 

directly recording the budget execution of each organization. The follow-up and 

evaluation section in the planning division in some organizations follows the expenditure 

reports from all organizations in order to keep monitoring budgeting system and provide 

information to the budget section and decision makers. 

In general, database and management systems are implemented by organizations 

at various levels from the central office to schools or institutional levels. These flows of 

financial information can be concluded as the following chart. 

Flows of financial information at Ministry of Education 

Decision Makers at 

Dept. & Ministry 

BOB/Ministry of 


Divisions & Bureaus 

Finance Division 

Planning Division 

Regions 

Provinces 

Information 

Budget 

Policy & 


Follow-up 

Evaluation 

Districts 

Budget Finance Accounting 

Schools, institutions, 

centers 

Direct Flow of Authority 

Indirect Flow of Authority 

Budget for education of BMA can be classified into two sources: local income 

of BMA and government subsidy. The subsidy is for salaries, wages, equipment, and 

student uniforms, stationary, books, lunch and supplemental food for students. 

129

The BMA Department of Education allocates local budget for schools at the 

district office in according to the Royal BMA Act. The educational district office is 

responsible for procurement procedure for all schools under its responsible area. A 

school does not have authority to purchase or execute budget by itself. It has to make a 

request of any needed purchasing to district. A district makes a four monthly request and 

report to the Budget division of the Office of planning and policy at BMA. The budget 

division will process budget request to the Comptroller office, Ministry of finance. 

Department of Education is responsible for subsidy execution. A school makes a 

request of purchasing amount and units to a district. The district makes a request for 

actual expenditure to finance division at department of education. The department 

requests for a permit of expense from the Comptroller office . Districts will process all 

purchasing. The Department of Education reports subsidy expenditure to the Office of 

policy, planning , and budget at BMA. Finance division of the Department of Education 

stresses on educational expenses and annual budget. It seeks for the source of money 

support, maintains the account and controls the balance of all expenses within the 

corporation of National bank and the Ministry of finance. 

At present, this decentralization system is being experimented by having 

schools undertaken purchasing procedure. 

Flows of Financial Information at BMA and BLEA 


BOB/Ministry of 


Office of Permanent 

Secretary 

Bangkok 

Metropolian 

Authority 

BMA Council 


Governor 

Mayors 

Municipal 

Councillors 

Division of 

Education 

Schools 

Department of Local 

Administration 

Bureau of 

Educational 

Administration 

Mayor of Pataya 

Permanent Secretary 

Division of 

Education 

Schools 

Budget 

Division 

Education 

Section 

Policy & 


Office 

District 

Offices 

Schools 

Department 

of Education 


Division 

Technical 

Division 

Plans and 

Information 

Section 

Description of content of current related data bases on educational resources 

130

(teachers, facilities, etc) if data bases exist in current form 

Table 4 describes the content of current related data bases on educational 

resources and existing educational information management systems. Every organization 

has its own information section responsible for developing an MIS for decision makers. 

In general, they produce sufficient information for planning and management in students, 

teachers, budget, but do not have a system of transferring data from a primary source 

automatically. Schools do not have application software to manage and administrate their 

routine operation to serve their clients effectively. 

131

Table 4: Description of content of current related data bases on educational resources (teachers, facilities, etc) if data bases exist in 

current form. 

Content of current MOE MOI 

Related databases OPS/EMIS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 

C 

National or Central level 

Information unit/section/center yes yes yes yes yes yes yes yes yes yes yes yes 

Information management system no no no no no yes yes no no no yes no 

Databases (Manual of data reporting 

System/Manual of information 

development system) 

Data bases accumulated 

Buildings, land, and facilities no no no no no yes yes no no no no no 

Students/Learners yes yes yes yes yes yes yes no no no no no 

Personnel and teachers yes yes yes yes yes yes yes yes yes yes yes yes 

Budget yes yes yes yes yes yes yes yes yes yes yes yes 

Finance yes yes yes yes yes yes yes yes yes yes yes yes 

Accounting yes yes yes yes yes yes yes yes yes yes yes yes 

Procurement yes yes yes yes yes yes yes yes yes yes yes yes 

General administration yes yes yes yes yes yes yes yes yes yes yes yes 

Data Collection 

Collect reporting forms yes yes yes yes yes yes yes yes yes yes yes yes 

Collect reporting disks no no no no no yes yes no no yes no no 

Data file transferred via 

• dial up line no yes no no yes yes yes no yes yes no no 

• internet yes yes no no yes yes no no yes yes no no 

• x-25 no no no no no no yes no no no no no 

• Thai-pak no no no no no no yes no no no no no 

Data processing : 

Data entry from reporting forms yes yes yes yes yes yes yes yes yes no yes yes 

Import data from disk by s/w 

no no no no no yes yes no no yes no no 

package, ex. MS Excel 

Import data from disk by application no no no no no yes yes no no yes no no 

s/w 

Update data on web yes yes no no no no no no no no no no 

132

Table 4: Continued. 


Related databases OPS/EMIS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 

General information reports to OPS, 

EMISC, General inspector office, 

ONEC, NESDB, BOB, etc, 

Nos. of students, enrollment, 

graduates classified by: 

Educational levels, grades, yes yes yes yes yes yes yes yes yes yes yes yes 

Schools, provinces, regions. yes yes yes yes yes yes yes yes yes yes yes yes 

Nos. of personnel classified by 

Teachers, yes yes yes yes yes yes yes yes yes yes yes yes 

civil servants, yes yes yes yes yes yes yes yes yes yes yes yes 

Permanent, and yes yes yes yes yes yes yes yes yes yes yes yes 

Temporary employees. yes yes yes yes yes yes yes yes yes yes yes yes 

Nos. of classrooms classified by 

Educational level yes yes yes yes yes yes yes yes yes yes yes yes 

Nos. of students per classroom yes yes yes yes yes yes yes yes yes yes yes yes 

Nos. of graduates classified by 

yes yes yes yes yes yes yes yes yes yes yes yes 

educational level 

Regional Level 

Collecting data from provinces yes yes - - - no yes - - - - - 

Processing data and send to central yes yes - - - no yes - - - - - 

Import data from disk by application - - - - - yes yes - - - - - 

Provincial Level 

Collecting data from districts yes yes - - - yes no yes - - - yes 

Processing data and send to central yes yes - - - no no yes - - - yes 

Import data from disk by application no no - - - yes yes no - - - - 

School/Center/Institution Level 

Collect data and fill up the reporting 

forms of: 

National education statistic report - - yes yes yes yes yes yes yes yes yes yes 

EMISC/OPS - - yes yes yes yes yes yes yes yes - - 

133

Table 4: Continued. 


Related databases OPS/EMISC DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 

Direct controlled division & dept. - - yes yes yes yes yes yes yes yes yes yes 

General inspector offices - - yes yes yes yes yes yes - - - - 

etc. 

Processing data and send to district - - yes yes yes no no yes yes no yes yes 

Import data from database by application s/w - - no no no yes yes no no yes no no 

Notes: yes = existing 




134

Table 5: Assessment of information system capacity and effectiveness (staff capacity, decision needs): data from interviews. 

MOE MOI 

Characteristics of IS OPS/EMIS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 


EMIS data base 

Manual Processing System yes no yes yes yes no no yes yes yes yes yes 

Relevance yes yes yes yes some yes yes yes some 

Accuracy fair fair fair fair fair good good fair fair 

Timeliness yes yes yes yes yes yes yes yes yes 

Systematic no no no no no no yes no no 

Up to date no no no no no no no no no 

Decision needs unsatisfied satisfied satisfied satisfied satisfied satisfied unsatis- satisfied satisfied satisfied unsatis- 

Staff capacity good good good good good good good good good good fair 

Application s/w Processing developing yes no no no yes yes no no no no no 

System 

Relevance yes yes yes 

Accuracy some yes some 

Timeliness no no yes 

Systematic yes yes yes 

Up to date yes yes some 

Decision needs satisfied satisfied satisfied 

Staff capacity good good good 

Budget and finance data bases 

Manual Processing System yes yes yes yes yes no no yes yes no yes yes 

Relevance yes yes yes yes yes yes yes yes yes 

Accuracy yes some some some some some yes yes some 

Timeliness yes yes yes yes yes yes no no yes 

Systematic no no no no no no no no no 

Up to date no no no no no no no no no 

Decision needs satisfied satisfied satisfied satisfied unsatis- unsatis- satisfied satisfied unsatis- 

Application s/w Processing developing no no no no yes yes no no yes no no 

System 

Relevance yes yes yes 

Accuracy yes some yes 

Timeliness no yes no 

Systematic yes yes yes 

135


MOE MOI 

Characteristics of IS OPS/EMIS DGE DOF DOPE DOVE DNFE ONPEC OPEC RIT ORIC BMA BLEA 

Up to date yes no yes 

Decision needs satisfied satisfied satisfied 

Staff capacity fair good good 

Personnel database 

Manual Processing System yes yes yes yes yes no yes yes yes no yes yes 

Application s/w Processing System no no no no no yes yes no no yes no no 

Notes: yes = existing 




some = existing in some level, but can not be estimated 

136

An assessment of information system capacity and effectiveness (staff capacity, 

decision needs) 

At national level 

Each organization has its own information system and mechanism for planning 

and management. It was found that three educational statistic data bases in the Office of 

Permanent Secretary: Planning Section, Educational Management Information System 

Center, and the Office of Inspector General were developed to get the same type of 

information. The data at the planning section is collected from all departments in MOE. 

EMISC has requested the Provincial Education Offices to collect data from local areas 

while the Office of Inspector General designs its own data collecting forms to gather data 

from local areas. Only the data base conducted by the planning section seems to get the 

most up-to-date data that is sufficient to supply policy makers. EMISC and the Office of 

Inspector General are changing to use the same data reported by each department. 

In addition, all basic education institutions in the country are required to submit 

the nation-wide statistics reporting form to the Office of National Statistics for 

processing. There are some duplicated efforts that make a burden workload to local areas 

as well as organizations in lines of ministry. 

EMISC, which has been trying to create MIS database software for local 

school/center, but has not solved the problem of how to develop applications suitable to 

administrate and manage many types of schools in various departments. Some schools 

and centers are operated in different regulations and principles. It seems impossible for 

EMISC to develop or use software that works routinely in the local environment. 

Therefore, in trying to establish the national database network, the new software 

developed by an outside professional company with the cost of 7.9 million Baht was 

designed by EMISC. The school needs to enter educational statistical data in the system, 

which is the same data as on the nation-wide statistics reporting form. The school can use 

those data for its own management. Schools can update data through internet or send data 

to district, district to province, and province to region or to department, and to EMISC. It 

is hoped that in this way the MOE will be able to create the national education database 

sufficiently for the decision makers at each level. 

However, from the researcher’s point of view, there are still two management 

issues to consider. First, even the database designed to get data from the primary sources 

schools must still enter the number of students, number of teachers, and sum of others. 

These data are not generated from a student’s database. If a school has separated software 

to manage their student’s records and registration, it will once again create a burden of 

duplicate the data entry. Secondly, error from data entry can not be controlled by the 

system. In fact, a school needs to have MIS database software to manage its routine 

work. How the system design can be easy to use, flexible, dynamic, and versatile as well 

as to link and exchange data with any existing systems should be kept in mind when 

developing any application software. 

Table 5 shows the assessment of information systems at the central level. 

137

At department level 

Data from interviews revealed that officials in the information sections always 

encounter problems of delays in collecting data. They never get data on time. They 

claimed that most of administrators at all levels take for granted the importance of 

reporting systems. People working in the local areas commonly get transferred so the 

replacements do not understand the system and do not know how to create reports using 

the applications. 

However, people from information section claimed that they could have sufficient 

information to supply to decision makers, but the information may not be used for several 

reasons. For example, in some departments, when they have to calculate budget, they 

would ask a local school to report the educational statistics accompanied with the budget 

request. This means that the actual statistics reported to the information section may not 

be used for budget allocation. In addition, they sometimes are confronted with the rapidly 

changing policy, which requires some unplanned collecting data. For examples, OPEC is 

currently faced with a problem due to lack of data on parents’ income for calculating the 

revolving fund amount. 

At the regional level 

Usually, the region helps to collect and send data in its areas. However, a regional 

MIS Database does not exist at this time. In terms of administration, regions are 

responsible for research and development. Not much emphasis is placed on management. 

At the provincial level 

Data from interviews revealed that all departments that have local institutions lack 

sufficient personnel to handle data requests from various organizations. In addition to the 

shortage, people are always changing their roles and responsibilities. Provinces usually 

collect data from districts and schools. Provincial staff also have limited knowledge of 

using computer and need to get training continuously. They also need to create their own 

databases for management in the responsible areas as well as linking them to both vertical 

and horizontal levels in order to connect, exchange, and report to upward automatically. 

At the school/center level 

At local schools or centers, their main job is to deliver services to their target 

group. They need computer systems to manage their routine operation in order to serve 

their clients more efficiently. At present, only DNFE has been developing student 

software application to implement at NFE centers. The program is developed on DOS 

platform so it is becoming out of date since most PC’s are changing to Windows95 or 98. 

The ONPEC and DGE are in the design phase of developing the school-level software, 

but the financial crisis has resulted in postponed work, and the Departments do not have 

approval of the project from the Ministry of Education even though the BOB and Ministry 

of Finance. DGE designs web pages to let school update its information via the internet 

web site. If all schools at all level had the MIS database systems in prioritized : student 

record and registration, budget, finance, personnel, budget, finance, accounting, and 

138

general administration, these systems could help the school manage their service 

effectively. In addition, if the data can be linked or transferred automatically, the burden 

of data reporting will be greatly reduced. Finally, the national MIS database can be 

formed. 

Analysis of gaps and information needs for finance analysis and decision making. 

Data from interviews can be summarized as follows: 

1. Time Overlapping. Budget allocation is undertaken in December annually. For example, 

in December 1998, each organization is required to submit plan of budget allocation 

request fiscal year 2000. Even though an official deadline to report 1998 educational 

statistics is on the 10 th of June, the most up-to-date complete data available is that of 

1997, because the educational data of 1998 will not be completely collected prior to 

December 1998. So the enrollment figures for each educational year used to calculate the 

budget of per head is usually 2 years behind the current fiscal year. This overlapped 

figure can affect budget allocations. When the number of students is more than that of the 

calculation for allocating budget, the budget per head is low, and a student would get 

subsidies lower than the standard criterion. That directly affects the quality of education 

services. When the number of students is smaller than that of the calculation, the budget 

will be cut down to the minimum requirement. If the use the current statistic data is 

required by the decision maker, an estimate of the current data will be undertaken. 

2. Budget Ceiling. Planning for educational management should include a needs 

assessment of target groups. This should include current conditions and problems. 

Resource needs, both public and private, should be taken into consideration in order to 

adjust the budget plans regularly and appropriately. In theory, adequate information is 

necessary for improving the budget allocation, but sometimes, the way to determine the 

budget ceiling is based on the previous year allocation. So the rate of budget increase in 

every plan is quite nearly the same, such an across-the-board increases of 10% of the 

previous year. It is necessary to analyze budget, rate of expending budget changes in 

each year, as well as the rate of budget distribution across the plans, tasks, or projects in 

order to allocate budget compatible with the actual practice. The use of the previous 

budget ceiling should be changed into analysis of expenditure by plans, tasks, and 

projects to allocate budget for the next fiscal year. 

The result of activities undertaken should be considered in adjusting budget plans, 

but this raises two issues. Firstly, a requests to adjust budget plans are rarely approved 

from the BOB, which seems to have negative effects on undertaking activities. Secondly, 

in order to get a budget adjustment, the request must be based on the approved plans even 

though the activities may be different from the plan. 

3. Timeliness It takes time to get a financial permit from the organization to the 

Comptrollers Office because the process needs to be checked and rechecked. the process 

implies that the information for checking is not systematically available. This delay 

affects the expenditure and all activities undertaken in various levels. In addition, if it is 

near the end of fiscal year, most organizations do not have enough time and information 

to operate activities effectively according to the budget plans. 

139

4. Lack of follow-up budget execution. It is a traditional practice which makes 

practitioners believe that any expenditure used according to the budget plans and finance 

regulations is correct and effective. The follow-up examination of budget execution is 

rarely undertaken, so Departments lack information on results to administrate finance 

effectively. It is observed that most departments have the follow-up and evaluation 

section responsible to take care of this task, some of them produce an annual follow-up 

budget report while the others do little or nothing. Improving the evaluation function of 

the BOB is a Bureau objective for the near term. 

5. Line Item Allocation. Budget is allocated by plans, tasks and categories of expenditure, 

but only the categories of remuneration, expense, and supplies are allocated by line item. 

So the expenditures in these categories can be mixed among the plans. The organization 

is able to administer the budget according to their purposes, but the procedures result in 

problems in analyzing budget allocations and expenditures. 

6. Policy Changing. When the policy is changed, it seriously affects the budget plans. For 

examples, the new director-general may change budget plans and locations that were 

already undertaken. This means that all procedures of budget allocation need to be 

renewed. 

7. Department Centralization. The budgeting system is allocated by Department, so it is 

very difficult to summarize by location or province across ministries. It is a gap of the 

system when seeking for information needs for financial analysis. However, in this 

research, the approved budget and the actual expenditure can be traced out from the 

existing database, but for the budget allocation still is inaccessible unless each 

organization summarizes their budget by province and these summary can be put together. 

140

Recommendation for IS 

Most involved personnel would like to have a system to help them work 

automatically, especially those in the financial sections. Actually some of them are still 

afraid of using computers for accounting, financing, and budgeting because they suspect 

of the accuracy of the output processed by computer system. In manual systems that they 

are used to, the checking of the output is done manually throughout the process. 

Personnel responsible for data collecting and gathering to build up databases and 

information for management at the central are confronting with the ignorance of those at 

the local level who are supposed to report data. At the same time those officials at the 

local center are struggling to respond to overlapping requests for data from various higher 

organizations. 

Under these circumstances, MIS should be designed in such a way that all 

educational activities undertaken at all schools/institutions/centers can be monitored and 

the available data would be really used for improving the local operation of a school/ 

institution/center. To accomplish this goal, representatives of schools/institution/center 

and decision makers at local, district, provincial, regional, as well as national levels need 

to discuss and make agreement on database design at each level. Emphasis should be 

placed on the information needed for the sake of local school/institution/center 

management by the reason that local personnel could take most advantages from the data 

compiled or produced by themselves. This would raise the commitment of those at the 

local level who are always asked to collect and send various kinds of data upward without 

any interest to make use of available data. 

Computers and application software should be supplied for each type of education 

service to school/institution/center, district, and province to be linked up by modems, or 

internet, if internet service is available in those areas. A bottom-up or local computerized 

database at all levels could be implemented. In light of these conditions, it is hoped that 

with such local database establishment micro-planning, action research, and 

decentralization can be strengthened. 

Most people in central information sections claimed that they never have 

sufficient data to supply the decision makers. Those administrators always ask for the 

data that do not exist in the current database. So when designing database, they tend to 

include too many data requests in the reporting forms, which can overload local staff who 

have to supply the data. 

In designing database for MIS at each level, there are several things to keep in 

mind. For examples, as more information is gathered, it is usual for MIS systems to 

identity further elements of information that are needed for a more complete picture. The 

application of MIS should be very dynamic and versatile system and must be designed 

and operated with the need for flexibility in mind. And also, in the actual gathering of 

information, very strict standards must be followed so that information from one 

geographic area exactly duplicated the parameters of information from other geographic 

areas. Only in this way, the information will provide the capacity for valid comparisons. 

These key issues need to be built-in as flexibility requirement in the MIS. 

141

It must be understood that whenever a group of computers exists in networked 

environment, an MIS does not automatically appear. The key to MIS is the type, format, 

intent, usefulness and control of the data that is transferred. An MIS does not just appear 

whenever a network connection is made; it requires very precise planning and 

coordinating. MIS can use existing networks, what controls this is the types of 

information required, the source of data, and the ease of interconnection between those 

who feed the system with data and those who manipulate and analyze the data for 

management purposes. 

In the case of trying to build an educational database for MIS from the bottom-up, 

linkage both vertical and horizontal levels, the followings activities are suggested: 

1. The database systems need to be developed based on a careful analysis of for 

management and operational needs at all levels in relation to: 

• Student’s records and registration system 

• Personnel management system 

• Budget administration system 

• Accounting and financing system 

• General administration system 

• Procurement management system 

These database systems should be prioritized according to the need of the decision 

makers and the practitioners. The database of students and that of the national population 

of the Department of Local Administration, Ministry of Interior should be connected by 

the citizen-id, so that the educational database of population will be gradually developed. 

In addition, the citizen-id should be linked to the tax payer id in the future. 

The personnel in MIS database is divided into two types: teachers and civil 

servants. In order to create a national database, teacher data should be connected to the 

database at Office of National Teacher Commission while civil servant database should 

be linked to Office of Civil Servant Commission for updating data. 

2. The analysis of content of educational database and the organization of computerized 

database at school/institution/center, district, provincial, regional, and national levels 

(or including necessary indicators) should be developed and listed as a minimum 

standard requirement for any type of education, private and public school, formal and 

non-formal education. Since such systems are actually exist or being developed in 

various organizations i.e. non-formal education organization, some secondary schools, 

EMISC center, data format and data dictionary can be a minimum requirement to 

exchange data between those different systems. 

3. The development of those selected systems. 

4. The selection of experimental sites for the whole process. Personnel involved will be 

trained. 

5. The implementation of the system, the consultancy and follow-up of MIS system will 

be provided. 

142

6. The nation wide implementation. 

The suggested system can be summarized as the following chart. 

143

Planning of recommended MIS database development 

Ministry of 

Ministry of Interior Computer System MIS Database Minimum Data 

Education 

Requirement 

National OPS/EMIS/ 

citizen 

Level 

ID 

Department 

Level 

Regional 

Level 

Provincial 

Level 

District Level 

Local Level 

ONPEC/OPEC/DGE/ 

DNFE/DFE/DPE/DO 

VE/ 

Office of National 

Teacher Commission 

(Citizen-id) 

Bureau of Education 

Religion & Cultural 

Dev 

Provincial Primary 

Ed Office 

Provincial General 

Ed Office 

Provincial Center for 

Phys Ed & Sports 

Provincial NFE 

Centers 

Provincial Ed 

Superintendent’s 

Offices 

847 District Primary 

Ed Office 

855 District NFE 

Service Centers 

780 District Ed 

Offices 

Schools/NFE centers/ 

Learning Centers 

basic education 

students ~14 million 

Citizen 

National 

Database 

OPS/ 

DOLA/ 

BLEA 

Province/ 

Governor 

125 

District 

Office 

489 

schools 

330,123 

students 

14,354 

teachers 

BMA/ 

Governor 

573 

Personne 

l 

50 

District 

Offices 

429 

schools 

267,136 

students 

13,135 

teachers 

National Computer System 

Client-Server Application 

Software 

RISC Server 

RDBMS 

OS: UNIX 

Internet Node Service 

Web Technology 

Department Computer System 


Software 

Windows NT, Unix 

PC or PC LAN or RISC 

Server 

RDBMS 

Internet Node 

Web Technology 

Regional Computer System 


Software both Stand-alone 

and Network 

Windows based OS, Netware, 

Windows NT 

PC or PC LAN, RISC Server 

Internet Connection to ISP 

Provincial Computer System 


Network 



PC LAN, PC Server or RISC 

Server 

Internet Connection to ISP if 

possible/or use x.25 

system/Thai Pak 

District Computer System 

Client Application Software 

both Stand-alone and 

Network 



PC or PC LAN, PC Server 

Modem dial-up-line 


possible 

School Computer System 

Client Application Software 

both Stand-alone and 

Network 



PC or PC LAN, PC server 

Modem dial-up-line 


possible 

144 

National Database 

Students 

Budget 

Accounting and Finance 

Personnel 

General Administration 

Procurement 

Department MIS Database 

Students 

Budget 


Personnel 


Procurement 

etc 

Regional MIS Database 

Students 

Budget 


Personnel 


Procurement 

Provincial MIS Database 

Students 

Budget 


Personnel 


Procurement 

District MIS Database 

Students 

Budget 


Personnel 


Procurement 

Local MIS Database 

Students 

Budget 


Personnel 


Procurement 

Office of Civil Servant 

Commission 

(Citizen-id) 

Student ‘s Database 

citizen id 13 char 

name 25 char 

sex 1 char 

date of birth 10 char 

grade level 1 char 

sum of statistics 

etc. 



name 25 char 

sex 1 char 



sum of statistics 

etc. 



name 25 char 

sex 1 char 



date of graduate 

sum of ed statistics 

etc. 



name 25 char 

sex 1 char 





etc. 



name 25 char 

sex 1 char 





etc. 

Ministry of 

Finance/BOB 

Comptroller 

Office 



Section 

Note: 

Data can be 

linked and 

exchanged.

References 

Office of the permanent secretary: OPS/EMISC 

Five-year plan of personnel development 1996-1999, Office of the permanent secretary, 

Jindasarn Ltd. 227 pages. 

Department of general education: DGE 

Number of classrooms, students, teachers, of special education schools, 1997, 32 pages. 

Number of classrooms, students, teachers, of general education schools Region 9. 

A report of student enrollment of special education schools. 

Educational Statistics in Brief. Planning division, Department of general education, 

academic year 1995, 100 pages 

Five-year plan of personnel development 2540-2544, DGE, MOE, Division of educational 

media, DGE, 2540, 189 pages. 

Four monthly expenditure of plan and task report classified by additional approved budget, 

disbursement, carry forward, and balance. 

Monthly report of expenditure disbursement classified by plans, tasks and seven categories of 

expenditure. 

Department of Fine Arts: DFA 

Educational statistics: teachers, personnel and students of institution of Department of Fine 

Arts, educational year 1997. 

Educational statistics of Institution of Fine Arts. 

Academic and education group, Fine Arts Institutions, Department of Fine Arts, 1995-1998. 

A reporting form of statistics for education and teachers educational year 1998. 

A reporting form of follow-up educational activities (planning form 1-6). 

Department of physical education: DPE 

A reporting form of statistics for education from province educational year 1998. 

A reporting form of undergraduate classified by subjects, sex, and provinces. 

An annual reporting form of students in vocational and high vocational certificate, 

educational diploma, and bachelor degree classified by plans and enrollment, 

Department of physical education, educational year 1998. 

An annual reporting form of students in educational diploma, 2-year bachelor degree, and 4- 

year bachelor degree of College of physical education. 

An annual reporting of graduates of institutions under Department of physical education. 

An annual reporting form of students expected to complete and the graduates of athlete 

schools under Department of physical education. 

An annual report of students in athlete schools under Department of physical education. 

A monthly reporting form of expenditure of institution. 

An institution reporting form of expending budget classified by categories and by institution. 

An institution monthly reporting form of non-budget expenditure by types. 

An institution monthly reporting form of utilities classified by items. 

An reporting form of criterion to save utilities for organizations of Department of physical 

education in Bangkok. 

Department of Vocational Education: DOVE 

A annual summary report of expenditure of tuition year 1997 of institutions under Technical 

division, General administration section, Technical division, 8 pages. 

A four monthly summary report of expenditure of institutions under Technical division, 

Technical division. 

145

A monthly report of expenditure of tuition by institutions. 

A reports of budget execution (9 forms PDOVE 5/1-5/9), Planning division, Budget section, 

Department of vocational education. 

An annual summary report of expenditure year 1997. 

An annual summary reporting of expenditure year 1998. 

A reporting form of educational statistics of teachers year 1998, institutions under Department 

of vocational education. 

A reporting form of educational statistics of students and teachers, year 1998, 71 pages. 

DOVE Statistics 1997, Department of Vocational Education, Ministry of Education. 

Kurasapa, Bangkok, 1998, 62 pages. 

DOVE, annual report of 1997-1998 anniversary of 57 years, Aug 19, 1998, Department of 

vocational education, Ministry of Education, Kurusapa, 1998, 103 pages. 

A summary of budget execution year 1997 reported by 14 organizations under Department of 

vocational education. 

Department of non-formal education: DNFE 

An annual non-formal education statistics report year 1997 Planning division, Non-formal 

education Department, Ministry of Education, 1998, 111 pages 

A Manual of Data Reporting in Management Information System of Non-Formal Education 

Department, Information technology center, Planning civision, Department of nonformal 

Education, Bangkok, Thailand, 1996, 112 pages. 

A summary of annual expenditure year 1997, Finance division, Non-formal education 

department, Ministry of Education, 1997, 250 pages. 

A manual of using S/W application version 3.1 of NFE student’s records and registration, 

Information technology center, Planning division, Non-formal education department, 

Ministry of Education, 1998, 300 pages. 

A manual of Online NFE student’s. Information for administrators, Information technology 

center, Planning division, Non-formal education department, 1998, 68 pages. 

Manuals of network S/W application systems for administrate and manage organization: 

General administration, Personnel, Budget, Finance, Accounting, and procurement. 

Information technology center, Planning division, Non-formal education department, 

Ministry of Education, 1997. 

A manual of online information for administrate and manage organization for administrators: 

6 systems: General administration, Personnel, Budget, Finance, Accounting, and 

procurement. Information technology center, Planning division, Non-formal education 

department, Ministry of Education, 1997, 49 pages. 

Office of national primary education commission: ONPEC. 

An annual educational statistics and data report: year 1997. 

A manual of using ONPEC41 program (MIS data entry program). 

A manual of using software package for follow-up project/budget execution: year 1997. 

A manual of using EVE41 program. 

A summary of application software development by Wanchai Jandum. 

A quarter reporting form of budget administration classified by properties and construction 

year 2541, Office of provincial primary education commission. 

A quarter reporting form of expending budget year 1998. 

A reporting form of education for regional year 1998, classified by district, province, and 

region. 

146

Office of private education commission: OPEC 

Statistics of Private Education Academic Year 1997. Policy and planning division, Office of 

the private education commission, Ministry of Education 2541, 141 pages. 

Manual for administrating private schools: General administration, Finance, and welfare for 

private school teachers, Division of General Education school, 1994, 239 pages. 

A summary of expenditure classified by programs and budget categories year 1997 (400, 

401). 

A summary of expenditure classified by programs and budget categories year 1998 (500, 

501). 

Four monthly expenditure classified by plans reported from province. (form 2060). 

Monthly report of expenditure disbursement classified by plans and tasks, and categories. 

Rajamangala Institure of Technology: RIT 

An annual reporting of educational statistics both for students and teachers by institution 

under RIT. 

A summary of four monthly approved budget fiscal year 1998. 

A summary of expenditure classified by categories, fiscal year 1998. 

A summary of expenditure classified by plans and tasks, and types fiscal year 1998. 

A summary of actual expenditure classified by categories, plans and tasks of fiscal year 1997. 

An annual report of applicants and students enrollment classified by educational grade, 

faculty, class room, sex, part-time and full time. 

An annual report of personnel. 

An annual report of enrollment and graduates. 

A monthly report of budget and non-budget execution. 

Bangkok metropolitan administration: BMA 

Structure of five-year plan of personnel development 2540-2544 . 

Five-year plan of personnel development 1997-2001, 58 pages. 

Document to promote educational information of BMA, Development of educational 

management information system for organizations under BMA, Technical division, 

Department of Education, BMA, Chumnom Sohakorn-Karn-Kaset, ltd. Thailand, 1997, 

163 pages. 

Educational statistics year 1997, Technical division, Department of Education, BMA, 42 

pages. 

School statistics year 1998, Information section, Technical division, Department of 

Education, BMA, 31 pages. 

Educational evaluation report of BMA schools year 1997, Technical division, Department of 

Education, BMA, 48 pages. 

Education Management of BMA, Department of Education, BMA, Aug 1998, 28 pages. 

Department of Education, BMA, 15 pages. 

An annual report of students’ achievement classified by educational levels and grades. 

A report of personnel and employee in Department of Education, BMA. 

An annual report of educational statistic report by district. 

An annual report of follow-up survey of students after completing grade 9. 

Bureau of Local Education Administration: BLEA 

Monthly reports of expenditure classified by types, plans, and items. 

Reports of subsidy budget execution on equipment classified by plans, items, and steps in 

procurement procedure. 

Report of property and construction classified by plans, types of budget, and steps in 

procurement procedure. 

Report of expenditure for assisting teachers. 

147

Educational statistics of local administration and Pataya city, year 1997, Bureau of Local 

Education Administration, Department of Local Administration, Ministry of Interior, 

1998, 154 pages 

A manual of experimenting to entry data of educational statistics from province, using MS 

Excel S/W format, 114 pages. 

148

Interviews 

10 September 1998, 9:00-12:00:- Mr. Parit Kunchorn Na Ayuthaya, Head of Information 

Section, Planning Section, Technical Division, Department of Education, Bangkok 

Metropolitan Administration, Ministry of Interior. Discussion on the infomation 

system, computer system and the finance implementation. 

10 September 1998, 13:00-16:00:- Ajarn Maneerat, Head of Accounting Section, & Ajarn 

Patharin, in charge of financial information collection under Ajarn Maneerat, Finance 

Division, Department of General Education, Ministry of Education. (Tel 628-5322) 

Discussion on financial information system from provinces to the central and computer 

system available. 

10 September 1998, 16:00-17:00:- Dr. Suwat Saktreesoon, Head of Information Section, 

Planning Division, Department of General Education, Ministry of Education. 

Discussion on information system, the follow-up system, and computer system. 

11 September 1998, 9:30-11:00:- Ajarn Yupin (Tel 282-9579,71) Head of Subsidy for School 

Section, Division of Subsidy, Fund and Welfare, Office of Private Education 

Commission, Ministry of Education. Discussion on subsidy system, issues and impacts, 

computer system. 

11 September 1998, 11.00-12:30:- Ajarn Somneuk. Head fo Planning & Budget Section, & 

Ajarn Kraingkrai, in charge of planning and budget, Planning Division, Office of 

Private Education Commission, Ministry of Education. Dicussion of budget allocation 

and financial information system. 

14 September 1998, 9:30-11:00:- Khun Attawut (Tel 668-9345) Head of Basic Information 

Section, Planning Division, Bureau of Local Education Administration (BLEA), 

Department of Local Administration, Ministry of Interior. Discussion on information 

system, financial information system and follow-up of finance school system. 

27 September 1998, 9:00-12:00:- Dr. Chatchawal Wataugsorn, Head of Information 

Sectionm, & Ajarn Wanchai Jundum, in charge of information system development 

under Dr. Chatchawal, Planning Division, Office of National Primary Education 

Commission, Ministry of Education. Discussion on information system, financial 

information, follow-up and monitoring system, and computer network infrastructure. 

2 October 1998, 9:00-11:00:- Dr. Chariya Tappakul Na Ayuthaya. Head of Statistics, 

Research and Evaluation Section, & Ajarn Wasit Oonrung-rueng, in charge of 

budgeting information collection under Dr. Chariya, Department of Vocational 

Education, Ministry of Education. Discussion on financial information, information 

system, and computer system. 

2 October 1998, 11:05-12:00:- Ajarn Sirichai Jumniansawat. Head of Computer Network 

System, Planning Division, Department of Vocational Education, Ministry of 

Education. Dicussion of issues and computer system available for schools and central 

office. 

12 October 1998, 9:30-11:00:- Ajarn Kanitha Treehirunyakul. Head of Follow-up and 

Evaluation Section, who is also previous former of Information Section, Planning 

Section, Office of Private Education Commission, Ministry of Education. Dicussion of 

follow-up & evaluation on budgeting system and information system. 

October 1998, 9:30-10:30:- Ajarn Mayuree Ratanamung. Head of Information Section, 

EMISC, OPS, MOE. Dicussion of information system at EMISC and FIS for decision 

maker. 

October 1998, :- Ajarn Kanjanaporn Jumpee. Head of Accounting Section, & Mr. Apichart 

Treesuk, Head of Budget Administration Section, Finance Division, Non-Formal 

149

Education Department, Ministry of Education. Discussion on accounting, and financial 

system. 

November 1998, :- Ajarn Seksan Kerdpipat. Head of Information System Development, & 

Ajarn Charnsak Lueng-trirat. Head of Computer Network System, EMISC. Discussion 

on information development system and computer system available. 

November 1998, :- Mr. Ekachai Panmen. Director of Muang District Non-Formal Education 

Service Center, Muang District Chiangrai Province, Chiangrai Non-formal Education 

Center, Department of Nonformal Education. Dicussion of district, provincial financial 

procedure and system. 

Phone Interview 

November, 1998. Mr. Satian (281-9809) EMISC, MOE. Discussion on finance system. 

November, 1998. Mr. Supansak (280-2940) OPS, MOE. Discussion on finance system. 

150

Appendix 2 

Projections of Costs of Expanding Basic Education to 12 Years 

a. By making some simplifying assumptions it is possible to estimate the increased costs 

of expanding basic education to 12 years. To calculate these estimates, it was assumed 

that the main goals of expansion would be to increase lower secondary participation rates 

to over 90 per cent by 2005, and to increase upper secondary participation rates to over 50 

per cent by the same year. The data shown in Table A1 are based on these assumptions, 

calculating the increases from the estimated baseline data for 1999 shown in the first 

column (from ONEC and MOE data). It is further assumed that the first year of 

implementation of the expansion policy would be 2000, and the increases in enrollments 

would be gradual, but at a constant rate over the time period involved. The parameters for 

the calculations and rates of increase are shown in Table A2. A constant inflation rate of 5 

per cent was assumed, and constant repetition and drop out rates as well. It was also 

assumed that the scale economies possible as a result of increased enrollments would be 

offset by the additional costs of expansion of facilities and infrastructure. Therefore the 

per-pupil costs are simply inflated by the assumed annual rate. 

Table A1 – Estimates of Impacts of Increasing Basic Education to 12 Years 

1999 2000 2001 2002 2003 2004 2005 

Primary Enrollment 

6,600,000 6,666,000 6,732,660 6,799,987 6,867,986 6,936,666 7,006,033 

Lower Sec. Enrollment 

3,700,000 5,121,720 5,416,912 5,691,036 5,977,898 6,279,185 6,595,655 

Upper Sec. Enrollment 

1,800,000 1,758,700 2,543,513 2,821,057 3,046,115 3,280,526 3,532,101 

Lower Sec. Partic. Rate 73.0% 75.9% 79.0% 82.1% 85.4% 88.8% 92.4% 

Upper Sec. Partic. Rate 44.0% 45.1% 46.2% 47.4% 48.6% 49.8% 51.0% 

Cost/primary enrollee 

9,300 9,765 10,253 10,766 11,304 11,869 12,463 

Cost/Lower Sec. enrollee 

11,000 11,550 12,128 12,734 13,371 14,039 14,741 

Cost/Upper Sec. enrollee 

14,400 15,120 15,876 16,670 17,503 18,378 19,297 

Total Lower Sec. (Million) 

40,700 59,156 65,694 72,469 79,928 88,154 97,227 

Total Upper Sec. (Million) 

25,920 26,592 40,381 47,026 53,317 60,291 68,160 

Increase Lower Sec. Cost 45% 11% 10% 10% 10% 10% 

Increase Upper Sec. Cost 3% 52% 16% 13% 13% 13% 

151

Table A2 – Parameters for Cost Projection Calculations 

Analysis Parameters 

Annual Increase in Primary Enrollment 1.0% 

Annual Increase in LS Partic. Rate 4.0% 

Annual Increase in US Partic. Rate 2.5% 

LS Repetition Rate 7.0% 

US Repetition Rate 10.0% 

LS Drop-out Rate 4.0% 

US Drop-out Rate 5.0% 

Inflation rate 5.0% 

b. To show the overall increases, two sets of projections are show in the Figures below. 

The first shows cost increases if the Government share of the costs remains unchanged. 

The second Figure shows the results of increasing the local government share from 1 per 

cent to 15 per cent over the projection period. In either case the overall increases are quite 

substantial. The overall expenditure increases in such a projection are sensitive to the 

assumptions about rates of change, however. Different rates of inflation or differing rates 

of enrollment increase or cost decreases can have a large effect on the actual cost figures. 

It is quite clear, nonetheless, that the increase in entitlement to basic education could 

produce a large increase in secondary school enrollments. This would, in turn generate 

substantial increases in overall costs for education and require adjustments in both overall 

budgets and revenue policies. The basic policy of expending basic education therefore 

will require considerable additional cost analysis and planning to avoid serious 

disruptions of the overall financing of education or negative impacts on quality. 

152

Projected Cost Increases for Expanding Basic Education to 12 Years 

180,000 

160,000 

Total Expenditure Estimates 


140,000 

120,000 

100,000 

80,000 

60,000 

40,000 

20,000 

- 

1999 2000 2001 2002 2003 2004 2005 

Total Lower Sec. (Million) 

Total Upper Sec. (Million) 

Projected Cost Increases for Expanding Basic Education to 12 Years With Local 

Government Sharing 

Total Expenditure Estimate 


180,000 

160,000 

140,000 

120,000 

100,000 

80,000 

60,000 

40,000 

20,000 

- 

1999 2000 2001 2002 2003 2004 2005 

Total Lower Sec. (Million) Total Upper Sec. (Million) Local Govt. Sharing 

153

School Survey Sample Frame 

Sample Frame for School Survey 

ONPEC 

PreK- 

Location G6 G1-G6 K - G9 

Appendix 3 

Description of School Survey 

Version of 

DGE 

8/20/98 

OPEC DVE MOI 

Lower Low-Up 

Sec. Sec. Primary Secondary not BMA BMA 

Poor Province 1 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

Poor Province 2 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

Mid-Inc. Prov. 1 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

Mid-Inc. Prov. 2 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

High-Inc. Prov. 1 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

High-Inc. Prov. 2 66 6 12 2 5 3 4 2 - - - - - - - - - - 

Urban Area 2 - - - - - 

Rural Area - - - - - - - - - - 

BMA - - - - - - - - - - - - - - - - - - - - 6 

Natnl Tot/levels 24398 1890 3959 515 1723 1113 1019 280 664 428 

Natnl Tot/agency 31419 2323 2645 280 664 428 

BMA/agency totals 38 118 952 21 428 

Per cent of Total 67.8% 5.3% 11.0% 1.4% 4.8% 3.1% 2.8% 0.8% 1.8% 1.2% 

400 33 66 12 30 18 24 12 12 6 

396 36 72 12 30 18 24 12 12 6 

Sample % 64.1% 5.8% 11.7% 1.9% 4.9% 2.9% 3.9% 1.9% 1.9% 1.0% 

School % 67.8% 5.3% 11.0% 1.4% 4.8% 3.1% 2.8% 0.8% 1.8% 1.2% 

Total Schools 35,989 

Nominal Sample 613 

Actual Sample 618 

Note: Distribution of sampled schools within Provinces not shown until provinces are selected and 

urban/rural distribution of schools can be estimated. 

154

Identification of Schools for Sample 

1. Identify provinces from poverty rankings, choosing provinces from the ranking by 

poverty indicators as follows: divide the ranking into thirds, 25 or 26 provinces in 

each section. Choose two provinces from the middle of each section such that the 

chosen provinces are distributed as evenly as possible through the country. 

2. Obtain the lists of schools of each type (see above table) from NEC staff or from the 

necessary Ministries or Departments. Using a random number table or equivalent, 

choose two samples of schools from these lists, using the amounts in the above table. 

Reserve the second sample as the source for replacement due to attrition from the 

small cells of the first sample. 

3. Obtain mailing addresses for schools in first sample. 

To be completed by ONEC: 

1. Obtain cover letters from each Department or Ministry with jurisdiction over the 

sample schools. The letters should endorse the survey and instruct the principals to 

complete it in a timely manner. 

2. Translate survey instruments into Thai language, and back-translate for accuracy 

check. 

3. Obtain or assist in obtaining lists of schools from sample provinces and districts. 

4. For the voucher focus groups, identify high and low-choice districts from MOE 

School Mapping facility. 

School Survey Instrument 

Introduction and Directions 

This survey is being sent to the principals or heads of many schools throughout Thailand. 

The research is sponsored by the National Education Commission, UNESCO, and the 

Thailand Research Fund. The purpose of the research is to learn more about the kinds and 

amounts of support schools receive from private sources. This study is important to the 

improvement of education in Thailand and your help is greatly appreciated. 

Please answer the questions below as completely as possible. If you do not know the 

exact answer to a question, please estimate to your best ability. When you are finished, 

please send the competed survey back to ______________________ in the attached 

envelope. 

Thank you for your participation in this project. 

Name of your school: _______________________________________________ 

Province: _________________ 

District: _____________________ 

1. Please place an X in the boxes below for each level of classes in your school: 


155

2. Please place an X in the box below that describes your school type: 

ONPEC 

Municipal 

Private (OPEC) Private (owner) 

DGE 

Vocational 

Other? 

______________________________________________ 

3. What is the total enrollment in your school this year (June 10)? ______________ 

4. Does your school receive regular donations of money or goods? ("regular" means 

donations that are part of normal planning for school finances.) 

Yes No if No skip to # 8 

5. Please estimate the total value of donations for each of the past three school years: 

Type of 

donation 

Estimated value for 

1995-96 


1996-97 


1997-98 

Money Baht Baht Baht 

Goods Baht Baht Baht 

6. Please fill in the table below with your best estimates of the value of support from 

each source that contributes to your school. Also, please also estimate the amount that 

you think this amount could be increased by extra effort or new strategies. 

Source of Support 

My school receives 

this type of support 

Estimated 1997-98 

support (Baht) 

Maximum possible 

increase (%) 

Parent/teacher 

yes no % 

organization 

Alumni organization yes no % 

Local government yes no % 

Local businesses yes no % 

School foundation yes no % 

Festivals and events yes no % 

Individual parents yes no % 

Temple or monastery yes no % 

NGO's yes no % 

Earnings from sales or yes no % 

rent 

Patron or special sponsor yes no % 

International donors yes no % 

Others ___________ yes no % 

7. As an administrator, do you help raise donations for your school? If so, how much of 

your time is spent on these activities? Approximate number of days per school term: 

________days 

156

8. Please place an X in a box below for each additional way your school received 

support this year (1997-98): 

donated labor for school activities or projects 

donated materials, food, or equipment 

donated buildings 

others? ______________________________________________________ 

9. What is the current tuition for your school? _________________Baht per year 

10. Are you able to set or increase the tuition amount for your school? Yes No 

If yes, amount of tuition increase (if any) for 1997-98 _____________ Baht 

11. Are you responsible for managing non-budget funds for your school? Yes No 

If no, what position has the responsibility 

_____________________________________ 

12. To whom do you account or report for the expenditure of your school's non-budget 

funds? 

_____________________________________________ 

13. What are the most important uses of the non-budget funds for your school? (such as 

purchasing new equipment, scholarships for students, etc.) 

14. Are any of these funds set aside for particular purposes, such as scholarships, special 

equipment, buildings, etc.? If so, please give the details below (purpose, amount set 

aside): 

15. Are there any other limitations on how this money can be used? If so, please explain. 

16. How would you rate the importance of non-government funds or support for your 

school? Please place an X in one box on the scale below: 

Not 

Important or Somewhat Very Extremely 

none received Important Important Important Important 

 

17. If your school has a budget summary or report for non-government funds for this 

year, please attach it to this survey. 

Thank you for your assistance in this research project. 

157

Appendix 4 

Demand-Side Analysis and the Financing of Education 

1. Introduction 

Report prepared by Dr. Sirilaksana Khoman 

1.1 At a time when human development has become crucial for the country’s social 

fabric and economic survival, there is urgent need for Thailand to confront the challenges 

that lie in the field of education, and overhaul the administrative and financial machinery 

needed to improve targeting and resource use. 

1.2 The current thrust of educational reform in Thailand includes steps towards 

decentralization of decision-making and curriculum diversification, greater participation 

of stakeholders, empowerment of those groups of stakeholders traditionally omitted from 

the decision-making process, and rationalization of financing to effect appropriate 

empowerment, responsibility (including financial responsibility) and accountability. Such 

de-control is envisaged as leading to the kind of flexibility that would be required to 

enhance quality and respond properly to the education needs of the country. 

1.3 The purpose of this study is to examine the behavior of one of the main stakeholders 

in education, namely the household, to determine the pattern of expenditure on education 

in order to gauge responsiveness to the reform programs that include student loans, 

possible changes in fee structures, and possible participation in allocation of government 

expenditures on education. Section 2 provides a cursory background to the main 

problems faced in the education sector, highlighting the weaknesses. The demand factors 

affecting access to education are discussed in Section 3 and household expenditure on 

education is examined in detail in Section 4, where the factors influencing household 

behavior are analysed. Policy implications are discussed and conclusions presented in the 

final section. 

2. Background Situation in Education 

2.1 Even before the economic crisis, increasing emphasis was being placed on human 

development, rather than income growth. “Investing in people” had become the catchphrase 

in the Eighth Economic and Social Development Plan (1997-2001). Indeed 

improvements in health and education were being recognized in their own right as means 

of promoting self-actualization, well-being and social responsibility, as well as being 

crucial elements to sustain the country on the economic growth path. 

2.2 Government expenditure on education, comprising about one-fifth of the national 

budget, had been fairly steady over the years, and has been on the rise as a percentage of 

GDP as Table 1 illustrates. 

2.3 Budgetary allocations have made possible the rapid increases in school enrollments at 

all levels. The first decade of planned development (1960-70) saw enrollments doubling 

at the lower secondary level and tripling at the upper secondary level, with secondary 

158

enrollment as a whole growing at an annual rate of 12 per cent. Pre-crisis enrollment in 

compulsory education (nine years) reached 97.7 per cent in 1996 (NESDB, 1996a). 

Table 1: Government expenditure on education, as a percentage of 

the government budget, and as a percentage of GDP. 

Education budget as % of 

Year Government budget GDP 

1989 16.6 2.6 

1990 17.9 2.7 

1991 19.3 3.0 

1992 18.6 3.0 

1993 19.3 3.4 

1994 19.5 3.5 

1995 19.2 3.4 

1996 20.3 3.7 

1997 21.9 3.9 

1998 24.9 4.0 

1999 25.3 n.a. 

Source: Government Budget, various years, GDP figures from Bank of Thailand. 

2.4 In 1993, enrollment in public institutions as a proportion of total enrollment was 83.6 

per cent. More recently, however, attempts have been made to accommodate greater 

private sector participation, especially in areas where external benefits are not perceived 

to be significant. In pre-primary education the government share is currently only about 

58 per cent, and at the undergraduate level its share, excluding the open universities, has 

dropped from 75 to 69 per cent during the last decade. Private participation in vocational 

training, in particular, has increased so significantly that the public sector share has 

dropped from 90 per cent in 1979 to only 53 percent in 1993 (MOE, 1995). 

2.5 With respect to non-formal education, the government operates a wide spectrum of 

programs, ranging from functional literacy groups, mobile technical-training units, 

seminars, radio programs, correspondence courses, and reading corners. These services 

are likely to have contributed to the advances in literacy that have been achieved over the 

years, catering to those missing out on formal opportunities of learning. Consequently 

literacy rates in Thailand are among the highest in the region, particularly in terms of 

female literacy. Educational expansion has also been translated into significant changes in 

the occupational distribution of the labor force prior to the crisis(NSO, 1996). 

2.6 In the midst of crisis the government is attempting to maintain budget allocations to 

the education sector as Table 2 demonstrates. Appropriations for education have in fact 

increased in the midst of crisis, increasing to 24.93 and 25.29 per cent of the budget in 

1998 and 1999 respectively. 

159

Table 2: Budget Appropriations by Function (millions of baht) 

FY 1998 % FY 1999 % 

General governmental services 172,079 20.73 164,261 19.91 

General public services 39,987 4.82 36,855 4.47 

Defense 83,103 10.01 77,140 9.35 

Public order and safety 48,989 5.90 50,266 6.09 

Community and social services 357,022 43.01 348,848 42.28 

Education 206,945 24.93 208,614 25.29 

Health 64,071 7.72 60,180 7.29 

Social security and welfare 34,048 4.10 36,636 4.44 

Housing and community amenity affairs 39,538 4.76 35,105 4.26 

Religious, cultural and recreational 

affairs 

12,421 1.50 8,315 1.01 

Economic services 215,517 25.97 196,257 23.79 

Fuel and energy 2,004 0.24 2,482 0.30 

Agriculture, forestry and fishery 63,284 7.62 61,288 7.43 

Mining and mineral resources, 

4,167 0.50 4,715 0.57 

manufacturing, and construction 

Transportation and communication 115,953 13.97 92,852 11.25 

Other economic services 30,110 3.63 34,920 4.23 

Miscellaneous and unclassified items 85,382 10.29 115,633 14.02 

Total 830,000 100.00 825,000 100.00 

Source: Bureau of the Budget 

2.7 But there are critical problems in the education sector that need to be addressed. 

These problems have their roots in the past pattern of educational development which are 

difficult to overcome in a short period of time due to the long gestation period required of 

educational investment. Thailand’s “development diamond” is shown in Figure 1 and 

highlights the incongruous nature with respect to school enrollment and per capita GNP. 

Compared with countries in the lower middle-income group as defined by the World 

Bank, Thailand’s success in the social sectors as measured here in terms of life 

expectancy, access to safe water, and gross primary enrollment falls short of what its per 

capita GNP would indicate. 

2.8 When secondary enrollment is considered, the blunter end of the diamond shape is 

further depressed so as to more closely resemble a triangle. In fact Thailand has been 

notorious for low secondary enrollment for decades. International comparisons of 

enrollment ratios, educational attainments, and sectoral employment show that Thailand’s 

situation is inconsistent with the pattern seen in other countries of comparable income. 

160

Figure 1: Thailand’s Development Diamond 

2.9 With the sole exception of Vietnam, the secondary enrollment ratio is the lowest of all 

the ASEAN countries, and well below that of the Republic of Korea many years earlier 

(Table 3). 

Table 3: Gross enrollment ratios: selected Asian countries 

Primary Secondary Tertiary 

Thailand (1992) 98 37 19 

Republic of Korea (1988) 104 87 37 

Singapore (1988) 111 69 12 

Hong Kong (1988) 106 74 12 

Indonesia (1992) 114 43 10 

Malaysia (1990) 93 56 7 

Philippines (1993) 111 79 26 

Vietnam (1993) 111 35 1.5 

Brunei (1992) 105 69 6 

Source: UNESCO (1995) 

2.10 In 1990 almost half of the children who completed primary school did not go on to 

receive secondary education. The low rate of continuation to the secondary level has long 

been seen as one of the most important impediments to economic and social development, 

that could derail the then-buoyant economy (for example Sirilaksana, 199..). The 

enrollment ratios for lower and upper secondary in 1986 were estimated to be as low as 

41 per cent of those aged 14-16 and 28 per cent of those aged 17-18 (NEC, 1986). This 

ratio was the lowest among all comparable middle-income countries, and shows that more 

than half of the Thai children in the age group 14-18 were out of school. 

161

2.11 In addition while the percentage of students continuing to the next grade has always 

been fairly high (85-98 per cent) in the primary grades, the percentage of those 

continuing on to secondary school after completion of the final primary grade drops 

dramatically to not more than 40-50 per cent, during the last two decades. In 1990 this 

rate was 39 per cent for government schools and 60 per cent for private schools. 

2.12 The situation had steadily improved, with lower secondary enrollment ratio showing 

a steady increase, and registering close to 70 per cent in 1993 (MOE, 1995). Moreover 

the latest figures (NEC, 1997) show that efforts to provide both formal and informal 

programs for youths with primary education have produced some results. A 

comprehensive review of enrollment in all educational programs reveals that the gross 

enrollment ratio at the lower secondary level actually exceeds 100 when non-formal 

education is included (Table 4). 

2.13 In addition, the crude transition rates for continuing to the next grade, presented in 

Table 5, show that significant improvements have been made. Even within a period of 

one year, transition rates from primary to the first secondary grade increased from 61.6 to 

68 per cent between 1992 and 1993, the most dramatic increases occurring in public 

schools. Transition rates are similar for boys and girls, so that gender breakdown is not 

shown. 

Table 4: Gross Enrollment Ratios by Education Level, 1994-1996 

1994 

1995 

1996 

Level of education Age group (a) (b) (a) (b) (a) (b) 

Pre-primary 3-5 64.60 73.70 78.36 

Primary 6-11 98.97 94.03 95.81 89.99 95.14 90.01 

Secondary 12-17 75.50 48.53 85.37 53.19 89.44 56.88 

Lower secondary 12-14 101.9 63.45 112.1 68.57 110.9 71.50 

Upper secondary 15-17 49.30 33.77 58.94 38.02 68.31 42.51 

Academic 15-17 33.79 18.25 41.67 20.76 49.18 23.40 

Vocational 15-17 15.51 15.51 17.27 17.27 19.13 19.10 

Tertiary 18-21 24.95 13.24 25.88 14.82 29.29 16.79 

Total 3-21 78.73 57.49 85.35 59.33 88.88 61.57 

Sources:Population Statistics from NESDB quoted in NEC (1997, Table 2). 

Student population figures from NEC (1997, Table 1). 

Student numbers in (b) exclude the following at the relevant level: 

Non-formal education, monks, students in open universities, and graduate students. 

162

Table 5: Crude transition rates of students continuing to next grade in general 

education, by type of school and level of education. 

1992 1993 

Level of education Total Public Private Total Public Private 

Primary 

Primary 1 - - - - - - 

Primary 2 88.6 89.5 82.1 85.7 85.8 84.4 

Primary 3 97.6 97.7 97.0 91.3 90.6 97.6 

Primary 4 98.3 98.3 98.2 91.2 90.4 98.6 

Primary 5 99.0 99.1 98.1 92.9 92.9 98.2 

Primary 6 97.0 96.8 98.8 90.1 89.2 99.0 

Lower Secondary 

Secondary 1 61.6 62.3 54.9 68.0 69.4 54.2 

Secondary 2 97.1 97.2 96.1 97.0 97.0 97.7 

Secondary 3 97.3 97.3 98.0 97.4 97.3 98.3 

Upper Secondary 

Secondary 4 44.7 47.6 23.3 46.7 49.6 23.6 

Secondary 5 90.4 90.6 87.4 91.2 91.4 88.3 

Secondary 6 90.0 90.6 81.9 90.3 90.8 83.1 

Source: Education Statistics, 1993. 

2.14 The improvement in the transition rate can be attributed to various measures that 

have been undertaken to reduce the cost of school attendance, particularly in the 

provincial areas. These include free schooling, school lunches, free uniforms and 

textbooks, and the addition of secondary grades to several existing rural primary schools 

with excess classroom and teacher capacity, increasing the geographic accessibility of 

secondary schools to the rural population. 

2.15 Higher incomes in general have also played a role. Continuation rates had always 

been found to be lower among children from socially and economically disadvantaged 

backgrounds. In 1988 about 88 per cent of the youths aged 12-14 were still in school in 

the urban areas, whereas the corresponding figure for rural youths in the same age group 

was a mere 68 per cent (NSO, 1988). Economic growth has helped to raise the 

corresponding figures to 92 per cent and 75 per cent respectively in 1991 (NSO, 1993). 

2.16 However some of this improvement is more apparent than real, and part of it was 

due to the changing demographic situation. First, low secondary enrollment is common 

where there is rapid expansion of primary enrollment, and transition rates tend to increase 

at lower levels first as schooling becomes more universal. With expansion of primary 

education stemming off in Thailand due to successful family planning, the pressure on 

places in secondary schools has been eased. The crude transition ratio merely reflects the 

ratio of the number of students in the next grade, compared with the students in the 

preceding grade, and thus may reflect the changing demographics and/or new recruits 

from those who had previously left school, and not continuation from the preceding 

grade. 

163

2.17 The latest Children and Youth survey (NSO, 199..) still shows that among children 

and youth aged 6-24 not attending school, the majority (63.6 per cent) had primary 

education or less. Among the 15-19 year-olds not in school, as many as 79.1 per cent did 

not go beyond primary school, and 58.2 per cent of the 20-24 year-olds were in the same 

educational category. Among the 12-14 year-olds a staggering 86.1 per cent of those out 

of school left school after completing primary education (Table 6). 

2.18 Thus an overwhelming number of children and youth can still be expected to attain 

only primary education, so that even though transition rates now improve, the impact on 

the overall educational attainment of the population will be not felt until way into 

the future. 

Table 6: Distribution of children and youth aged 6-24 not in school, 

by educational attainment, age, and residence 

No 

Secondary 

Other 

Age group Total 

education 

Less than 

primary Primary Lower Upper 

Upper 

Vocational Tertiary 

and 

unknown 

6-11 100.0 88.5 10.8 0.2 - - - - 0.5 

(773.5) 

12-14 100.0 5.0 8.2 86.1 0.4 - - - 0.3 

(696.5) 

15-19 100.0 2.0 8.1 79.1 9.0 1.1 0.5 0.1 0.1 

(4,075.8) 

20-24 100.0 2.2 15.1 58.2 10.9 6.2 3.4 3.5 0.5 

(5,636.1) 

Urban 100.0 6.5 9.0 42.5 19.4 7.6 7.0 7.8 0.2 

(1,310.2) 

Rural 100.0 8.6 12.2 66.3 7.4 3.0 1.2 1.0 0.3 

(1,310.2) 

Whole 100.0 8.3 11.8 63.6 8.8 3.5 1.9 1.8 0.3 

Kingdom (11,182.1) 

Numbers in parentheses are numbers of children and youths, in thousands. 

Source: NSO, Children and Youth Survey (1993). 

2.19 The survival rates by cohort, presented in Table 7, compares the number of students 

completing a given level with the number that entered that level, holding the group 

constant, at the end of 1993. These survival rates give more insight into the situation. 

Even at the primary level, a survival (or completion) rate of around 80 per cent can be 

considered low. In private schools only 67 per cent of entering students completed 

primary education in 1993. For the secondary level as a whole only a troubling 33.5 per 

cent of entering students completed, with private schools showing only 15.7 per cent 

completion by cohort. Nevertheless, there had been signs of improvement even in a 

period of just one year during the boom years. With the current crisis causing reportedly 

high drop-outs, the situation is aggravated considerably. 

2.20 Even with the improvement at the upper secondary level, the survival rate has to be 

interpreted with care. This is because a large number of students each year take the school 

leaving equivalence examination that at that time allowed them to apply for tertiary 

education without completing the final grade in school. More detailed information is 

needed about the causes of attrition. In any case, those who survive to upper secondary 

are generally not those who need to be prioritized or targeted for public policy 

intervention. 

Table 7: Survival rate by cohort of students in general education by type of school 

164

and level of education, 1993 and 1994 (%) 

Total Public Private 

Level Of Education Completed 1993 1994 1993 1994 1993 1994 

Primary 80.4 84.6 82.2 86.2 67.2 72.3 

Secondary 33.5 34.7 35.9 37.1 15.7 15.7 

Lower Secondary 94.6 94.8 94.6 94.8 94.5 95.2 

Upper Secondary 81.7 82.4 82.3 82.7 72.6 77.0 

Source: Education Statistics, 1993 and 1994 

2.21 Even though this problem has been long recognized, the measures to deal with the 

problem can only have a gradual effect. Even if secondary enrollment were to be boosted 

to 100 per cent, the effect on the productivity of the workforce will not be felt for another 

decade. 

2.22 Simulations to the year 2000 of the economic and income distribution consequences 

of differing continuation rates to secondary school show that, given certain assumptions, 

increased secondary enrollment will have a perceptible effect on the economy only after a 

long lag. Even if 100 per cent continuation is achieved in 1996, the proportion of the 

workforce with primary education or less will still range between 75 to 70 per cent by 

the year 2000 (Chalongphob, 1991). 

2.23 Even during the boom years, more than 60 per cent of the Thai labor force was still 

in the agricultural sector as opposed to 40 per cent in the Philippines or 55 per cent for the 

Republic of Korea as early as 1965. Even though educational opportunities have 

increased, the overall structure of educational attainment of the labor force has not 

changed significantly. Out of the total labor force, as high as 72 per cent still have 

primary education or less, compared with 49 and 44 per cent for the Republic of Korea 

and Taiwan even ten years earlier (Table 8). 

2.24 Current trends also indicate that in the year 2000 about 80 per cent of the total 

population will still not be educated beyond the primary level (NESDB, 1996a). The 

current crisis exacerbates the situation further. 

Table 8: Proportion of workforce with primary education or less: selected countries 

Country 

Per cent of workforce 

Thailand (1991, 1995, 1998) 73.9, 72.0, 75.0 

Republic of Korea (1980) 49.1 

Taiwan (1980) 44.0 

Singapore (1980) 62.7 

China (1982) 71.3 

Malaysia (1980) 58.4 

Philippines (1980) 56.5 

Sources: For Thailand, NSO (1991, 1995, and 1998) and NESDB (1996a). For other countries, 

Psacharapoulos and Arriagada (1986), cited in Pernia (1990). 

165

2.25 The quality of education also remains a key concern. Even though innovative 

methods of learning such as distance learning, student-centered rather than teachercentered 

learning, as well as work apprenticeship have been experimented with, and mass 

education through satellite relays envisaged, these are exceptions rather than the rule. In 

addition these are mere techniques that may not translate into inspired curricula or 

learning processes. Rote learning is pervasive even in the best schools, and innovative 

forms of learning are confined only to small segments. Vocational schools lack 

equipment and teachers lack motivation. Moreover the improper targeting of 

beneficiaries has led to problems of regional disparity, inequality of access, and 

inefficient resource use. 

2.26 The initial path of import substitution that Thailand pursued required little upgrading 

of the skills and capabilities of the general workforce. Industrial promotion favored the 

use of imported capital, and the indigenous labor utilized was mainly unskilled. The 

reversal of policy in the 1970s towards export promotion further depended on the 

country’s vast supply of low-cost labor, largely with low education. 

2.27 The need to equip the workforce with upgraded skills as well as capability in science 

and technology had hitherto not been felt and was not a political agenda. For a problem to 

achieve the exalted state of a political agenda, a plaintiff is required. Unlike 

unemployment or inflation where people are directly affected and votes can be linked to 

policy success, problems with the quality of education (like a current-account deficit) 

produces no obvious victims. 

2.28 Today the ability of the labor force to adapt to rapidly changing conditions of work 

and skill requirements has become ever more crucial as technologically-sophisticated 

sectors play a more and more prominent role and as the crisis takes its toll in further 

downsizing of government agencies and corporations alike. 

2.29 Even before the crisis, educational institutions were in general ill-equipped to deal 

with the nation’s manpower needs. Constraints were felt both in terms of resources to 

keep up with advances in knowledge and maintenance of modern facilities, and in terms 

of retaining quality staff. The high cost of operating and keeping up with new 

technologies (new equipment, materials, and so on) and the much higher salaries for 

selected personnel in private industry during the boom years competed away qualified 

staff, and added to the difficulty of educational institutions in producing adequate 

manpower supplies, especially in science and technology. Inadequate research and 

development activity limits the nation's access to discoveries, technology and innovations 

developed everywhere in the world. This constrained the country's ability to adapt 

technologies, to draw upon and assimilate the world's scientific and technological 

resources, to support new productive activities, upgrade existing techniques, and 

accumulate the kind of knowledge that leads to sustained increases in productivity and 

international competitiveness. 

2.30 Such capability is essential for the process of drawing upon indigenous knowledge 

and use of local materials, processes, and know-how. Because educational institutions 

were not able to produce an adequate supply of researchers and scientists, the ability to 

build up an expanding capacity for R&D within the institutions as well as in industry was 

limited. 

166

2.31 Questionable quality of education and the low continuation to secondary school are a 

major hindrance in the first step towards production of a skilled and adaptable labor 

force, not to mention the creation of scientific, engineering and technical manpower to 

enhance Thailand's technological capability. 

3. Access to Education: Demand Factors 

3.1 Inequity of access to education has long been evident in Thailand. Students in urban 

areas tend to leave school at a higher age than rural students; in rural areas, the majority 

of children not in school (70.7 per cent) left at age 12-14, whereas in urban areas only 43 

per cent left school at that age (NSO, 1993) 1 . 

3.2 The supply side cause, namely the unequal geographic distribution of schools has 

long been one of the main causes of non-continuation and thus low secondary enrollment 

among the disadvantaged groups. The latest Education Statistics (MOE, 199..) show that, 

out of the total number of private secondary schools in the country, almost half were 

located in Bangkok, and none in the villages. For municipal schools, enrollment in 

Bangkok alone was almost equal to total enrollment for the rest of the country. All public 

kindergarten schools are located in urban areas, not to mention the heavy urban 

concentration of private kindergartens and schools. 

3.3 But inter-related demand side factors are also at work. The Surveys of Children and 

Youth (NSO, various years) have always found that financial difficulties were the major 

reason for leaving school. The cost of education indeed imposes a disproportionate 

burden on the poor relative to their incomes. The total time and money cost to a village 

household of sending a child to a public lower secondary school in town can amount to an 

increase of almost four times the cost of his/her primary education. If the child fails to get 

admitted into a public school, which normally selects students by means of a competitive 

entrance examination, the cost of going to a private school would amount to more than 

half of their total annual income. Because of the sequential nature of the curriculum, if it 

is perceived that only completion of the higher level would make the lower level 

worthwhile, there would be no incentive to go to lower level if the total financial burden 

of completing the curriculum up to the highest level is prohibitive. Thus, low participation 

rates are mainly confined to the most disadvantaged groups: low income, rural 

households. And the problem is transmitted vertically along the education ladder since 

several screening examinations have to be passed. 

3.4 Table 7 above also shows that among urban youth not in school, 41.8 per cent had 

attained secondary education and above. The corresponding figure for rural youth was 

only 13.6 per cent. This of course reflects the urban-rural differential in terms of 

availability of jobs requiring different qualifications, but also indicates the disadvantages 

of the rural population. 

3.5 The question of quality can be seen as a question of equity and access as well. Large 

divergences in quality exist between schools in terms of input measures such as 

availability of textbooks, instructional materials, laboratory equipment, computer usage 

and teacher qualifications. Again access to better-quality schools tends to be based on 

region of residence and socio-economic status. The marked differences in quality 

1 The latest Children and Youth survey was in 1998, and the results are not yet available. 

167

penalizes the children in rural schools, unless these families incur substantial additional 

costs to attend the better-quality urban schools right from the primary level. 

3.6 Among the reasons why the least-advantaged groups invest less in the education of 

their children are market conditions that work against the poor and perhaps also the 

limitations on employment opportunities imposed by societal stratification and 

entrenched networks of information and contacts. Only in the formal labor market, 

particularly in the public sector and the larger private firms, are there clear returns to 

education. Thus, if the prospect of gaining employment in the formal sector is believed to 

be low, many of the poor rural families would opt for no schooling beyond the primary 

level because of the high cost and low perceived returns. 

3.7 This situation compounds the problem of inequity since low education begets low 

incomes. The inter-generational perpetuation of inequality is likely to accelerate in the 

future as production technology becomes increasing more complex and as employment 

shifts increasingly out of agriculture and into industry. In the process the demand for 

educated workers would no doubt increase and their wages would be driven upward 

relative to those with less education. 

3.8 Various studies also show that a large number of siblings also depresses the chances 

of a child continuing on to secondary school (for example, Chalongphob et. al., 1988). 

This finding brings out the link between fertility and the demand for education that has 

been found in other countries. High fertility tends to be associated with low-income rural 

households, and the link to low educational attainment can be seen as a segment in the 

well-known vicious circle. 

3.9 In addition, even when remaining in school and educational opportunities are 

available, children from poor families do not perform as well as other children. High 

birth-order has been found to have an independent negative effect on school performance 

and possibly the ability to learn (Sirilaksana, 1986). The main causes of drop-out and 

repetition of grades were found to be poverty, malnutrition, illness and absenteeism. This 

situation exacerbates the problems of unequal access, low continuation rates, and low 

income among rural households. 

3.10 Chalongphob (1988) found, among those denied access to secondary education, the 

first entry into the labor market is predominantly as unpaid family workers, working on 

the family farm or household enterprise. As these individuals get older, some become 

employees in the private and public sector, but by far the majority of those with lower 

primary education remain in the family enterprise (farm and non-farm) either as heads of 

that enterprise (thereby changing status into own-account workers) or as unpaid family 

workers. Since the income of own-account workers are on average much lower than other 

types of workers in the economy, the gap in incomes between those with primary 

education and better-educated groups has been widening. 

3.11 The overall pattern of employment indicates that workers with mere primary 

education are more than proportionately found in segments of the economy that are less 

prosperous and less progressive. In particular, agriculture has been, and still is, the main 

employer of those with primary education. Unfortunately, this is the sector which by far 

has the lowest value added per head. The large differential between the share of 

employment in agriculture and the share of agriculture in GDP indicates a high degree of 

168

income inequality between agriculture and non-agriculture. To the extent that income 

determines the accessibility of education especially beyond the compulsory primary level, 

this would lead to lower enrollment at the secondary level among agricultural households. 

In fact, analysis of the 1994 and 1996 Socio-economic Survey data reveals that this is the 

case. Income gaps between agricultural households and non-agricultural households have 

been widening since the mid-1970's. Thus, the income gap between those with primary 

education and those with more education has also been widening. 

3.12 The Labor Force Surveys also show that the relative position of those with primary 

education is rapidly deteriorating vis-a-vis the better-educated groups. Thus differential 

participation in the educational system is an important cause of income inequality and of 

its perpetuation over time. Educational policies need to be designed to counterbalance the 

tendency for income disparities to persist across generations through education. Measures 

are required that would increase the access of those with relatively low education to the 

more prosperous sectors of the economy, and to ensure increasing participation in the 

education system for the younger generation, so that current disadvantages are not 

inherited. 

4. Analysis of Household Survey Data 

4.a. In the attempt to empower household stakeholders and shift the approach from the 

supply side to the demand side, an understanding of the factors that affect expenditures on 

education and the responsiveness of expenditures to changes in purchasing power would 

allow analysis of the effect of financing schemes to be introduced under the proposed 

Education Act. 

4.b. Analysis is conducted of the latest two Household Socio-Economic Surveys (1994 

and 1996) 2 from unpublished household-level data, in order to shed light on the pattern of 

expenditure on education, and the effect of changes in income on education expenditures. 

4.c. The household survey, called the Socio-economic Survey or SES is currently 

conducted by the National Statistical Office (NSO) every two years, and contains 

information on income, expenditure, changes in assets, possession of durable goods and 

living conditions. It is a nationwide survey, with the sample selected through stratified 

two-stage sampling. The data used in the present analysis differ somewhat from the 

reported data, due to some differences in definition and the fact that reported information 

contain only averages, whereas data at the individual household level is also used here. 

Specifically expenditure on education is defined here to include as much of the 

expenditure incurred to make schooling possible. For example, school uniforms are 

included as expenditure on education here, whereas the NSO includes this item under 

clothing. 

2 The 1998 survey has been conducted but data was not available at the time of writing. 

169

4.1 General Pattern of Income and Expenditure on Education 

4.1.1. As can be expected the average household incomes of residents of the Bangkok 

Metropolitan Region (BMR) is the highest in the country. Table 9 shows that income 

inequality is still pervasive, with household incomes in the Northeast remaining virtually 

unchanged in relative terms between 1994 and 1996 at a level of 34 percent the average 

household income in the BMR. There is also evidence of a widening gap between the 

BMR and the rest of the country, since the disparity indices have either worsened or 

remained unchanged for all the regions in Thailand. 

4.1.2. For rural Thailand, the relative position vis-à-vis the BMR has in general worsened, 

with disparity indices falling by as much as 4 percentage points for the rural South, and 3 

percentage points for rural households in the Central region. 

Table 9: Average Annual Household Income in 1994 and 1996 

Average 

household 

income: 

1994 

Average 

household 

income: 

1996 

% change 

in average 

household 

income 

Disparity Index: 

(as % of BMR 

income) 

1994 1996 

Region and Area 

Whole Kingdom 99,144 129,348 30.5 - - 

BMR 197,016 263,364 33.7 100 100 

Central 104,688 130,884 25.0 53 50 

North 75,120 99,972 33.1 38 38 

Northeast 67,188 88,656 32.0 34 34 

South 96,168 118,152 22.9 49 45 

Municipal District 

Central 153,312 189,096 23.3 78 72 

North 154,044 205,656 33.5 78 78 

Northeast 156,828 206,736 31.8 80 78 

South 149,724 184,500 23.2 76 70 

Sanitary District 

Central 126,396 158,628 25.5 64 60 

North 85,584 113,232 32.3 43 43 

Northeast 98,100 118,104 20.4 50 45 

South 113,016 159,108 40.8 57 60 

Rural 

Central 91,860 115,068 25.3 47 44 

North 64,944 87,912 35.4 33 33 

Northeast 56,712 76,848 35.5 29 29 

South 84,528 103,308 22.2 43 39 

Source: Socio-Economic Surveys, 1994 and 1996 

4.1.3.In terms of expenditures, data indicates that expenditures on education rank third in 

terms of importance after food and housing. 3 Expenditure on education as a percentage 

of total household expenditures varies within a narrow range across regions. Data shows 

that BMR households spend on average a little over 6 per cent of their total household 

expenditures on education, whereas in the Northeast, only 3.58 per cent of household 

expenditures is devoted to education and supplies. 

3 Only the 1996 data are shown here, since the 1994 results were similar. 

170

4.1.4. The percentages calculated from the SES data are much lower than that obtained 

from the Parents Survey conducted by ONEC. This is probably due to the fact that the 

ONEC survey was a purposive survey of some 6,000 respondents and the questions were 

focussed specifically on educational expenditures, whereas the nationwide SES typically 

has a sample size of over 30,000 households, with comprehensive and detailed questions 

on every component of income and expenditure. As such interviewer attention was not 

directed specifically at education expenditures. The difference is likely to lie in the 

reported figures for contributions to schools, but enumerators at the NSO believe that 

only an insignificant number of households make sizeable enough contributions for this 

to affect overall national averages and stand by their figures. 

4.1.5. When expenditures on education are calculated as a proportion of household 

income, the expected Engel pattern is seen. Table 10 divides households in each region 

into income quintiles, and shows that the proportion of household income spent on 

education varies inversely with the level of income. This indicates that even though high 

income families spend more on education in absolute terms, these expenditures remain a 

smaller proportion of their income than in the case of poorer families. This can be taken 

to indicate the “burden” of educational expenditures that fall disproportionately on the 

lower income groups. 

4.1.6. This pattern re-affirms the need to target subsidies in favor of low-income groups. 

Identifying individuals or households that are “poor” may be an intractable task, given 

the data requirements, the prevalence of subsistence activities, underreported incomes, 

and the tendency for some groups to pass themselves off as “poor”. But other targeting 

methods may be used, including (i) geographical demarcation, whereby poor areas are 

defined for coverage, (ii) self-targeting, using variations in the cost and quality of 

services to induce self-selection, and (iii) targeting based on socio-demographic 

characteristics such as age, sex, occupation and ethnicity if financial vulnerability are 

believed to be based on these characteristics. For example, it is clear from the regression 

analyses that, for the same level of income and other characteristics, a female household 

head tends to spend more on the household’s education than a male household head. Thus 

families in poor geographical areas with females at the head of the household would be 

more suitable for subsidy. The first step would therefore be to ensure that an up-to-date 

information system exists. 

Table 10: Average expenditure on education as a percentage of average income, 

1994 and 1996 

Bottom Quintile Next Quintile Next Quintile Next Quintile Top Quintile 

1994 1996 1994 1996 1994 1996 1994 1996 1994 1996 

BMR 6.77 4.11 4.36 5.74 3.72 4.32 5.17 5.24 5.20 4.73 

Central 6.09 5.77 5.12 5.11 4.67 4.82 4.26 4.09 2.73 2.72 

North 5.72 5.10 5.10 5.29 4.51 4.59 3.98 4.42 2.64 2.72 

Northeast 5.43 6.61 4.92 5.07 3.94 4.19 3.86 3.40 2.42 2.20 

South 8.09 7.99 6.02 6.80 5.55 5.39 5.07 4.08 2.86 2.52 

Whole Kingdom 6.01 6.21 5.16 5.43 4.52 4.67 4.42 4.18 3.35 3.05 

171

4.2 Total Expenditure on Education 

4.2.1. An attempt is made to estimate the total expenditures on education by the 

household sector so that a comparison can be made with the government budget. The SES 

household data is used to estimate the total size of private household expenditure to 

attempt a first step at a “national education account” that would show the relative shares 

of expenditure on the part of the government and the private households. Corporate and 

non-government contributions are also estimated, so that a “national education account” 

can be constructed, consolidating all the expenditures in the economy. 

4.2.2. The Budget Bureau indicates a figure of 169,561 million Baht allocated to 

education by the government in 1996 4 . Although budget figures and actual expenditure 

can differ, this is taken to be a first estimate for the purpose of comparison only. 

4.2.3. The SES data on education expenditures are “blown-up” based on the sampling 

technique and the weights attached to each household type through the process of data 

collection by stratefied two-stage sampling, with provinces in all regions constituting the 

strata, and the administrative area (municipal areas, sanitary districts, and the remaining 

areas) used as sub-strata. The primary and secondary sampling units were housing blocks 

for the municipal areas, and villages for the non-municipal areas. The “blow up” takes 

into account the probabilities of selection and uses the weights to determine the average 

expenditure on education for each type of household in each area in each region. A 

weighted-average expenditure for each province is thus obtained, and multiplied by the 

actual number of households in each of the 76 provinces. The latter was obtained directly 

from unpublished worksheets from the National Statistical Office. 

4.2.4. Household expenditures in 1996 are thus “blown up” and the resulting figure is 

86,650.2 million, representing about 51 per cent of government expenditure on education 

in 1996. 

4.2.5. Estimates of corporate and non-governmental contributions are made from data on 

corporate/non-governmental contributions and scholarships obtained from the Ministry of 

Education and the Ministry of University Affairs. This is admittedly an underestimation, 

and more accurate estimates will have to be made. 

4.2.6. The resulting estimates are summarised in Table 11 These preliminary figure show 

that the share of the government in contributing to investment in education is around 66 

per cent. 

4 Even though 1998 and 1999 budget figures are available, household information can only be estimated for 

1996 at the latest. Therefore 1996 is used for purposes of comparison. 

172

Table 11: Public and Private sector expenditure on education 

Million Baht % of budget % of enrollment 

% of total 

expenditure 

Public Sector 

Pre-primary and primary 74,945.96 44.2 60.6 29.15 

Secondary 42,390.25 25.0 28.6 16.49 

Academic 28,994.93 17.1 40.3 

Vocational 12,208.39 7.2 4.8 

Other 1,186.93 0.7 

Higher Education 28,486.25 16.8 10.8 11.08 

University 26,960.20 15.9 8.1 

Non-degree 169.56 0.1 2.7 

Other 1,356.49 0.8 

Services not defined by level 2,543.42 1.5 0.99 

Services n.e.c. 17,295.22 10.2 6.73 

Miscellaneous 3,899.90 2.3 1.52 

Total Public (1996) 169,561.00 100.0 100.0 65.96 

Private Household* 86,650.20 33.71 

Private Corporate/ 

Non-Government** 856 0.33 

Total Expenditure 257,067.20 100.00 

* Estimated from SES data 

** Estimated from scholarship data at the institution level supplied by the Ministry of University 

Affairs and the Ministry of Education 

4.3 Factors Affecting Expenditure on Education 

4.3.1 An analysis of the factors that affect household expenditure on education is 

important even though the latest available nation-wide household socio-economic data is 

for the pre-crisis years. This is because the behavior of the household in response to 

different factors is useful to determine responsiveness to changes in policy and proposed 

measures. Regression analysis allows estimation not only of the direction, but also the 

magnitude of the response. 

4.3.2 It can be seen from Table 12 that household expenditure on education is 

significantly influenced by a number of factors, and the pattern is consistent through 

time. An addition household member increased expenditure by 132 Baht per month in 

1994 and 167 Baht per month in 1996. Further refinement in the estimation using only the 

number of school-aged children within the household was also used, with similar results 

and are not shown here. 

4.3.3. The educational attainment of the household head also has a significant influence 

on the amount of household spending on education. An increase of one year of schooling 

raised educational expenditures by 22 Baht and 33 Baht in these two years. Household 

income and urban residence also had the predictable positive effect on the amount spent 

on education. 

4.3.4. The results also bring out the magnitude of the effect of household location in the 

various regions of Thailand, in comparison to households located in the Bangkok 

Metropolitan Region. Northeastern households consistently spend less than BMR 

households by 580 Baht per month. 

173

4.3.5. What may perhaps seem surprising at first sight is the negative influence of 

“professional occupation” on spending on education. The results in Table x5 show that 

households headed by professionals, as opposed to farmers and non-professionals tend to 

spend less on education. However, the size of the influence is not statistically significant, 

and if we bear in mind that the influences of income, educational attainment of household 

head, and other factors are already taken into account, the result simply shows that the 

positive relationship that we might expect is already taken care of through income, the 

education of the household head, and other variables, so that being a “professional” in 

and of itself, does not influence expenditure on education. 

Table 12: Factors affecting the size of household monthly expenditure on 

education: regression results 

1994 1996 

Independent Variables 

Regression 

Coefficient t-statistic 

Regression 

Coefficient t-statistic 

Number of household members 132.974 34.238** 167.876 49.364** 

Educational attainment of household 

22.353 11.277** 33.981 23.917** 

head 

Household income 0.008595 20.371** 0.005362 18.863** 

Northeastern region -495.120 -21.057** -580.375 -28.980** 

Urban residence 81.735 5.606** 74.179 5.964** 

Farming occupation -93.831 -5.532** -34.338 -2.101* 

Southern region -393.807 -15.546** -467.954 -21.117** 

Northern region -405.335 -16.793** -447.002 -21.232** 

Central region -378.933 -15.872** -445.262 -21.235** 

Male household head -62.342 -3.935** -94.033 -7.074** 

Non-farm, non-professional 

- - 38.789 2.689** 

occupation 

Professional occupation -12.732 -0.386 - - 

Unemployed -80.093 -4.131** - - 

Constant 91.724 2.943 46.028 1.698 

R-squared 0.111 0.171 

Adjusted R-squared 0.110 0.170 

Source: Estimated from unpublished Socio-Economic Survey household data. 

* Statistically significant at the 95% level. 

** Statistically significant at the 99% level. 

4.3.6. Another unfamiliar result to some, might be the result that, given the same level of 

income, education, and other characteristics, male household heads tend to spend less on 

household education than females. This confirms the results from numerous studies on 

nutrition, child health, and child education in developing countries that have found the 

child quality is greatly affected by the presence of the mother as the decision-maker 

present in the household. The negative effect on education expenditures of the male 

household head is consistent here in both years under analysis, other things being equal. 

4.3.7. With respect to the proportion of income spent on education, again Table 13 shows 

that higher income households spend a smaller proportion of their income on education. 

In addition, given the same characteristics, farmers tend to spend a higher proportion of 

their income on education than do other occupation groups. 

174

4.3.8. As would be expected, unemployment exerts a consistent negative effect on 

spending on education. In terms of the current crisis with rising unemployment as well as 

underemployment, it is important not to introduce short-run crisis measures that run 

counter to the long-range efficiency and equity goals. 

Table 13 The “burden” of education: factors affecting the proportion of income 

spent on education: regression results 

1994 1996 

Regression 

Regression 

Independent Variables 

Coefficient t-statistic Coefficient t-statistic 

Number of household members 1.242 34.424** 1.230 36.665** 

Educational attainment of household 0.147 8.226** 0.226 14.015** 

head 

Household income -0.000054 -14.118** -0.000050 17.767** 

Northeastern region -1.817 -8.328** -1.514 -7.422** 

Urban residence - - 0.433 3.530** 

Farming occupation 0.584 4.296** - - 

Southern region -0.484 -2.057** -0.529 -2.416** 

Northern region -0.857 -3.828** -0.844 -4.058** 

Central region -0.975 -4.415** -1.182 -5.710** 

Male household head -0.797 -5.546** -0.848 -6.460** 

Non-farm, non-professional 

- - -1.140 -7.937** 

occupation 

Professional occupation -1.401 -4.574** -3.378 -11.619** 

Unemployed - - -0.557 -3.268** 

Constant 1.370 5.296 1.446 6.558 

R-squared 0.052 0.064 

Adjusted R-squared 0.052 0.064 

Source: Estimated from unpublished Socio-Economic Survey household data. 

* Statistically significant at the 95% level. 

** Statistically significant at the 99% level. 

5. Policy Implications 

5.1 Even though private household expenditures form a fairly large portion (about 34 per 

cent) of the country’s outlay on education, this portion is less than the private 

contribution to health expenditures in Thailand (about 55 per cent). In addition the direct 

cost of many kinds of public education in Thailand is almost entirely borne by the 

government. Fees charged, as a percentage of costs, range from 2 to 22 per cent for 

secondary schools, from 4 to 37 per cent in vocational education, from 30 to 42 per cent 

in teacher training, and from 7-14 per cent in public closed universities (Khoman 1996). 

Consequently, all calculations of the rate of return on investment in education invariably 

show private rates of return exceeding social rates at all levels. Tuition fees at the tertiary 

level on average amount to only 3.5 per cent of the annual family income of university 

students (NEC 1991). More recent information shows an even more pronounced pattern. 

The situation is slowly being eased by gradual de-control of private school fees, and 

allowing “self-financing” programs to be initiated in government institutions. 

Administrative reform however is slow in coming. Crises can provide the opportunity for 

reform, but at the same time obstacles may be compounded. 

5.2 Nevertheless, subsidies and financing need to be rationalized. For long-term 

efficiency, it is important to keep in mind that pricing is intimately linked to how services 

175

are financed and thereby involves broader concerns of determining how much of the 

economy's total resources are devoted to education, how much should be spent by the 

government, and how much burden non-government sources should bear. Low cost 

recovery means that the burden is passed on to non-users through reliance on general tax 

revenues. And the taxes needed to pay for such subsidies often create distortions 

elsewhere in the economy. Stark differentials between costs and fees also lead to 

misleading signals to both provider and user. Low fees result in excess demand, creating 

an incentive to resort to non-price methods as an allocative device instead of the price 

mechanism. Users begin to seek preferential access to services through personal 

connections, position and clout, leading to greater inequity. In addition, the quality of the 

services tends to be driven down due to the lack of resources. 

5.3 Low fees and charges are supposed to help the disadvantaged groups. But several 

studies have shown that the clearly disadvantaged groups are often denied access 

especially from the secondary level upwards. On the other hand, low fees in the (heavily 

subsidized) public schools and the control on fees of private schools prevents both school 

expansion, quality improvements, as well as quality-enhancing competition. The highest 

fees charged by the public schools had been less than 20 per cent of the maximum fees 

allowable at the corresponding levels in the private schools. Such controls have in the 

past limited the ability of the private sector to expand. Many private schools have now 

had to close down altogether as the economic crisis takes its toll on household incomes 

and purchasing power. The easing of controls on private initiative and the infusion of 

private-sector discipline into public schools and universities that has already begun 

should not only enhance quality, but should serve equity and efficiency goals as well. But 

in mid-crisis, such reforms have to been carefully spelled out and explained. 

5.4 The financing of education needs to be overhauled so that social benefits and costs are 

more closely aligned. This would mean a whole package of differential fee structures to 

reflect social costs and benefits, and deregulation, with student loans taking the place of 

current government control. The current policy direction is towards a direct subsidy 

through vouchers to the student rather than the school, and student loan programs have 

begun. But tackling the problem calls for three types of public finance reform: redirecting 

spending toward activities in which government participation is most critical, increasing 

reliance on user and other benefit-related charges to finance such spending, and 

decentralizing some public responsibilities to those in closer touch with local needs and 

conditions. Thus the whole spectrum of measures needs to be considered as a package 

program: increased user charges, student loans, scholarships for the truly needy, and/or 

bonding (which, in effect, is a subtler kind of loan), and training in management. 

5.5 Educational institutions that are given greater financial and administrative autonomy 

have to be accountable as well. But many schools may not be ready for autonomy so 

perhaps school networks can be encouraged through fiscal incentives, whereby high 

quality schools can help less advantaged schools in the network. Such financial and 

administrative reform should improve access, quality as well as resource use. 

5.6 The potential functions of the state to lie in the areas of distribution, correction of 

market failures, counteracting the absence of futures and insurance markets, dealing with 

externalities, public goods, and merit wants. Any services provided by the state have to 

meet these criteria. Apart from that, cost-based criteria should be used, regardless of who 

the provider may be. 

176

5.7 The dilemma is to balance the short-run crisis management measures with long-term 

efficiency and equity goals, balancing the negative and the positive factors (depicted in 

Figure 2). 

Figure 2: Balancing the Negative and Positive Factors 

Negative factors 

Positive factors 

Increasing unemployment 

Reduced subsidy for some 

forms of education, 

leading to higher fees. 

Increasing underemployment 

Ability of 

household to 

spend on 

education 

Student loans 

Per-student allocation 

for basic education, 

Equalizing amounts 

Employment, 

apprenticeships 

Contribution from 

local community 

(through taxes, etc.) 

5.8 With the crisis creating hardships in terms of unemployment, underemployment, and 

displacement, the ability to pay for education-related expenses is reduced. Unemployment 

and redefined underemployment rates are showned in Table 14. As can be seen in Figure 

3, unemployment rates have jumped in 1998. The unemployed and grossly 

underemployed have reached 6.2 per cent of the labor force. Figure 4 shows that 

underemployment, defined as working less than 40 hours per week jumped to about 24 

per cent of the labor force in February 1998. 

177

Figure 3: Unemployment rates 

12 

%, 

tota 

l, 

cur 

ren 

t 

lab 

or 

for 

ce 

10 

8 

6 

4 

6.2 

3.4 

2 

0 

Round 1 

Round 2 

Round 3 

Round 1 

Round 3 

Round 1 

Round 2 

Round 3 

(February) 

(May) 

(August) 

(February) 

(August) 

(February) 

(May) 

(August) 

1996 

1996 

1997 

1997 

1998 

1998 

Unemployment rate (% current LF) 

Seasonal inactive labor force (% total LF) 

Unemployed and grossly underemployed 

Figure 4: Underemployment (% of current labor force) 

25 

20 

Working less than 20 hours/week 

Working less than 40 hours/week 

% of current labor force 

15 

10 

5 

- 

1996 

(Feb) 

1996 

(May) 

1996 

(Aug) 

1997 

(Feb) 

1997 

(Aug) 

1998 

(Feb) 

1998 

(May) 

1998 

(Aug) 

178

Table 14: Unemployment and Underemployment (thousands) 

1996 1997 1/ 1998 

Feb-96 May-96 Aug-96 Feb-97 Aug-97 Feb-98 May-98 Aug-98 

Total Total Total Total Total Total Total Total 

Total 59,750.4 59,902.6 60,045.3 60,350.6 60,648.9 60,949.0 61,098.0 61,248.4 

Total labor force 31,898.4 32,504.1 32,750.0 32,000.2 33,560.7 32,143.1 32,169.8 33,352.9 

1.Current labor force 30,740.5 31,035.0 32,586.3 30,964.2 33,454.9 30,892.2 30,167.8 33,275.9 

1.1 Employed 30,099.2 30,375.4 32,232.3 30,266.3 33,162.3 29,412.9 28,554.9 32,138.0 

Underemployed (

5.12 Incentives for cost containment, reduction of the incentive towards over-utilization, 

and so on, should also be built into the system, through for example, cost-sharing schemes 

for services chosen beyond the basic level. However in designing policies, one also needs 

an understanding of what functions governments have assumed in the past, and why. An 

understanding of the behavior of the state is also relevant in determining the desirability of 

government action. In addition, the appropriate form of intervention also depends on the 

instruments available to the government, such as what taxes and expenditure policies are 

feasible, what kinds of information is available to the government, what incentives there 

are for individuals to reveal information (such as about their endowments or their 

preferences for public goods), and the constraints on the government's actions. In addition, 

the incentives of the government itself have to be taken into account, such as whether 

there is a tendency to favor certain segments of the population, and tax some groups of 

the population more heavily to subsidize others inappropriately. 

5.13 Public provision, the nature and type of financing schemes, the level of fees, all 

affect the behavior of producers and consumers and influence the distribution of wealth 

and income in the economy. If the beneficiaries are not the truly needy, then public 

provision can be distortionary. Whether a disproportionately heavy burden is placed on 

the poor depends on how spending is allocated and revenue raised. If wealth taxes such 

as property taxes, capital gains taxes, and inheritance taxes are low or non-existent, then 

public provision could have regressive elements. All these considerations have to be dealt 

with, if long-run benefits are to be reaped, and sustainable development accomplished. 

5.14 Decentralization has long been supported as a means to achieve administrative 

reform and improvement in quality. There are certainly good a priori grounds for 

thinking highly centralized systems would underperform: incentives are distorted, 

logistics are a nightmare, and disinterest in performance at the periphery is pervasive 

because of the lack of everything, notably inputs. So decentralization is likely to be a 

good idea. But with all good ideas, it is easier to think of them in the abstract than to 

translate them into workable game plans. Just how is decentralization supposed to work? 

5.15 Decentralization by itself is no panacea. Several important considerations need to be 

borne in mind. It is not a valuable public policy simply because existing public systems 

are inadequate. Decentralization of services, management, and service delivery incentives 

may be desirable, but what is difficult is the translation of ideas into workable solutions. 

What decentralization should accomplish are the following: improvement in the delivery 

of services, efficiency, better performance of personnel through improved incentives, and 

elimination of waste and inefficiency through too highly structured administrative 

systems in the center. It should not be thought of as simply giving more authority to rural 

areas. It is not a regional or geographic concept, but a concept based on efficiency, 

performance, and satisfaction. Thus, decentralization planners will want to rethink not 

only the location of schools and facilities, but the very essence of these institutions: what 

should the schools be like -- indeed should the government run and operate any schools? 

How should these facilities be staffed? How will we ensure access for the poor? How 

can budgetary/financial resources for education be maintained in a devoluted system? 

5.16 There may be also be resistance to the redistribution of political power and 

empowerment of disadvantaged groups, and strategies to deal with this would have to be 

thought out. Finer details also have to be considered. For example, should everything 

from personnel, procurement, to budgetary decisions be devoluted from the center? Are 

180

there any activities that would be better done in a centralized fashion, that is, that have 

demonstrable economies of scale? How can success or failure be measured? These are 

questions that require careful study. A complete and timely information system would be 

an essential ingredient, and perhaps this is what the central authority should do. 

5.17 One of the most difficult aspects that need to be determined is how to construct 

quantitative measures of success and failure. One big issue here is time: it will take some 

time before one can figure out if decentralization has improved access, efficiency, and 

performance. Just to show process changes is insufficient. If the system is still inefficient 

and underperforms, even if some of the personnel are happier, it is not sufficient reason to 

decentralize. 

6. Conclusions 

6.1 Government intervention can take on a variety of forms, ranging from regulatory 

functions, fiscal incentives through tax and subsidies, information dissemination, and 

direct government provision. The mere fact that intervention is justifiable does not 

prescribe the form that it should take. Nevertheless broad prescriptions can be made. The 

positive externalities argument suggests that incentives should be provided to increase 

society's production and consumption in such areas as basic education as opposed to 

training in specific skills, where problems of non-appropriation of benefits are less. 

Greater externalities arising from primary education and literacy programs imply that 

these endeavors should receive relatively more attention than higher levels of education. 

Where information imperfection and asymmetry are the problem, programs for 

disseminating information should be emphasized. 

6.2 Measures to reduce the costs of secondary education to low-income rural families 

need to be continued and properly targeted. Because the majority of the poorly-educated 

people work in the low-paying informal sector, efforts should be made to target public - 

programs towards this sector. Government programs that touch only those in the formal 

sector, such as subsidies for government employees’ children, or civil service housing 

assistance, are not likely to improve the lot of the disadvantaged groups. 

6.3 The household level analysis shows that income levels have an appreciable effect on 

the size of spending on education, and that the “burden” is greater on lower income 

groups. Programs that relieve the financial burden on parents should do much to improve 

investment in their children's education. For adult workers, increased non-formal 

education for primary school leavers should be emphasized. Non-formal and adult 

education has contributed significantly to the low rate of illiteracy in Thailand and should 

continue to be stressed. But programs that relieve the financial burden should not go 

against efficiency and equity considerations. 

6.4 In principle, blanket subsidies and subsidies for non-critical services should be 

avoided. User charges should be set in line with costs, with adjustments for equity and 

efficiency considerations. The charges can be earmarked to finance the expansion of 

priority services, while increasing rather than decreasing efficiency. Publicly provided 

goods and services will be used efficiently if they are priced to reflect the cost of 

production as well as externalities and other market imperfections. In contrast, subsidized 

(or underpriced) services result in excessive consumption and excess demand, and the 

taxes needed to pay for such subsidies often create distortions elsewhere in the economy. 

181

User charges lead to a double efficiency gain: they allocate the supply of public goods 

and services efficiently, and their use avoids the need for distortionary taxes. 

6.5 The present policy dilemma is to reconcile short-term crisis management measures 

with long-term efficiency and equity goals. 

182

References 

Chalongphob Sussangkarn (1991) “Education, Labor Markets, and Economic Development: 

Policy Simulation”, paper presented at the 1991 TDRI Year-End Conference, December. 

_____________________, Direk Patamasiriwat, Teera Ashakul, and Kobchai Chimkul 

(1988) The Long-term View on Growth and Income Distribution, Paper prepared for the 

TDRI Year-End Conference, December. 

Sirilaksana Khoman (1993) “Mechanisms of Socio-Economic Change in Rural Areas: 

The Case of Education and Health in Thailand”, Review of Marketing and Agricultural 

Economics, 61:2 

__________________(1996) "The Current State and Prospects of Thailand's Economy: 

Health and Education" Paper presented at the Fifth Convention of the East-Asian 

Economic Association, Bangkok, October 25-26, 1996 

Thailand. National Statistical Office, Survey of Population Change, Bangkok. 

Thailand, Office of the Prime Minister (various years) Government Budget, Bangkok. 

Thailand. National Economic and Social Development Board (1996) Eighth National 

Education Plan 

Thailand. National Education Council (1995) Report on the Evaluation of Educational 

Management and Performance of the Seventh National Educational Development Plan 

Bangkok: NEC. (in Thai). 

Thailand. National Education Council (1992) Costs of Higher Education, Bangkok. 

Thailand. National Education Council (1997) National Education Data, Academic Years 

1994-1996, Bangkok. 

Thailand. National Statistical Office (1977, 1983, 1987, 1993) The Children and Youth 

Survey, Bangkok: NSO. 

UNESCO, Statistical Tables, 1998. 

183

Education 

Level 

Appendix 5 

Impacts of Crisis on Private Schools 

Summary of Information Supporting Students Affected by the Economic Crisis 

Number of Students No. of Number of Students Owing Money 

1997 1998 Drop- 

1997 1998[1] 

Actual Planned Actual outs- Number Amt. Owed Number Amt. Owed 

No 

Notice 

No. of 

Crisisaffected 

Students 

[2] 

K1 117,193 135,522 109,957 8,685 13,730 33,881,810 31,193 69,339,993 29,353 

K2 120,002 127,149 133,888 8,268 13,591 32,256,213 41,419 114,245,374 17,350 

K3 110,690 122,900 108,613 6,316 16,892 30,301,984 28,326 126,397,591 17,119 

Pre-Prim. 347,885 385,571 352,458 23,269 44,213 96,440,007 100,938 309,982,958 63,822 

Total 

G1 116,196 121,924 107,457 2,348 13,793 24,011,512 28,854 94,553,007 14,934 

G2 98,699 110,110 98,043 1,191 19,307 22,206,881 44,285 105,896,984 13,660 

G3 94,504 102,872 90,533 786 7,506 22,364,342 36,095 104,807,240 12,260 

G4 83,285 97,139 84,995 862 6,886 19,711,243 38,882 102,235,491 11,640 

G5 79,754 91,674 77,800 551 6,833 19,765,007 35,203 91,133,436 10,937 

G6 77,110 89,389 74,932 594 4,989 14,188,517 35,354 90,331,362 26,638 

Prim. Total 549,548 613,108 533,760 6,332 59,314 122,247,502 218,673 588,957,520 90,069 

LS1 47,946 54,358 46,729 843 3,537 7,322,248 8,985 21,701,870 5,437 

LS2 46,641 49,822 43,515 657 3,687 8,199,636 12,629 35,229,269 14,082 

LS3 42,444 47,958 41,898 450 2,442 5,770,369 12,955 39,514,740 5,671 

Lower Sec. 137,031 152,138 132,142 1,950 9,666 21,292,253 34,569 96,445,879 25,190 

Total 

US1 15,257 17,308 16,031 288 2,052 1,865,969 1,726 5,437,547 1,284 

US2 12,291 14,437 13,149 248 853 1,927,546 3,067 12,778,051 1,687 

US3 9,288 11,770 9,887 183 388 1,161,339 2,984 13,356,328 853 

Upper Sec. 36,836 43,515 39,067 719 3,293 4,954,854 7,777 31,571,926 3,824 

Total 

Prim+Sec. 723,415 808,761 704,969 9,001 72,273 148,494,609 261,019 716,975,325 119,083 

Total 

Grand 

Total 

1,071,300 1,194,332 1,057,427 32,270 116,486 244,934,616 361,957 1,026,958,283 182,905 

Notes: [1] First Semester 1997-98 Totals only. 

[2] From survey of schools asked to estimate effects. 

Number of Schools 

reporting = 1,582 

184

Appendix 6 

BMA Voucher Policy 

A. Local Education Initiative: Cooperation between Local and Private Schools 

The Department of Education under the Bangkok Metropolitan Administration 

(BMA) has initiated a project on the Provision of Educational Coupons in 4 pilot districts of 

Bangkok since the academic year 1998. Based on the concept of privatization 1 this project secure 

private participation in the provision of local education in Bangkok Metropolitan Area with 

financial support from BMA in the form of educational coupons. This project enables students 

applying for seats in the BAM schools and cannot be admitted because there is no place left to 

enroll in private schools through the agreements between the BMA and private schools as 

follows: 

1. The provision of educational coupons will be arranged through the matching of BMA schools 

and private schools that, in the academic year 1998, will provide education from Grade 1 up 

to the highest grade of both schools. 

2. In the academic year 1998, private schools participating in the project will be provided 

financial support as educational coupons for the amount of 13,936 Baht/student/year (which 

equals to the average operating cost for education of BMA in 1997 as calculated by the 

Department of Education). As for the next academic year, the expenditure for educational 

coupons will be allocated according to the average cost per head in the previous year 

calculated by the Department of Education 

3. Provided with financial support as educational coupons, the private schools have to use this 

sum of money for school fee, school uniforms, meals and supplementary foods, books and 

stationery, and other services as provided to other students. They are not allowed to charge for 

any additional expense except other activities' fees approved by BMA. 

4. The private schools have to provide educational services and others to students eligible for 

educational coupons equal to other students and have to submit progressive report on student 

performance to BMA every semester. 

5. The BAM will be responsible for the expenses of educational coupons for eligible students 

until they finish the highest grade of the schools. 

6. The selection of eligible students for educational coupons will be based on the criteria 

set under the agreements between those schools. 

The selection criteria for students applying for educational coupons are as presented below. 

1. The eligible students are those applying for seats in BMA schools from Grade 1 up to the 

highest grade offered in those schools or the highest grade offered in private schools matching 

to those BMA schools. 

2. The distance from home to the pilot school must be within 5 km or in the jurisdiction of the 

District Office providing educational coupons. 

185

3. The duration of registration as residents must not less than one year (as of June 10th of that 

academic year). 

4. The income of student's parents must not exceed 120,000 Baht 

5. The selection must be approved with mutual discretion of private and BMA schools in 

the pilot project. 

186

Appendix 7 

Finance Allocation Methods 

Two different approaches to an allocation method are presented here. They are based on 

two different mechanisms: (1) weighting the count of individual students to reflect 

variations in the desired level of subsidy for each student type, and (2) weighting the 

amount of subsidy to which a school is entitled based on a school-level measure of need. 

These approaches could be considered as alternative methods or as complementary 

approaches to be applied to fine tune an allocation mechanism to meet policy objectives. 

Student Weighting Scheme 

This approach employs a system of weights assigned to the number of different 

types of students in different programs. The weights determine a weighted student count 

as the basis for allocating per-pupil subsidies. The total subsidy to which a school is 

entitled would then be determined by multiplying the standard per-pupil subsidy times the 

weighted count of students. For example, primary school students in regular programs 

could be weighted at 1.0, and handicapped students in the same programs could be 

weighted at 2.0. A school with 100 regular primary students and 10 handicapped primary 

students would then have a weighted student count of 120: (100 x 1.0) + (10 x 2.0)=120. 

The school’s subsidy would then be equal to 120 times the subsidy amount. 

In such a scheme, establishing of the weights for different types of students and 

programs becomes the focus of allocation policy decision making. The weighting system 

can allow for many fine-grained distinctions to be made among students and programs, so 

as to target funding according to equity and educational program concerns. For example, 

The weighting could provide for different allocations by both type of student and type of 

program, as shown in the table below (example weights only for illustration only): 

Weights for Each Student Type 

Program Level Regular Handicapped Gifted 

Pre-primary .75 1.25 .75 

Primary 1.0 2.0 1.2 

Lower Secondary 1.25 2.0 1.4 

Upper Secondary 1.40 2.25 1.5 

Vocational Secondary 1.50 2.25 1.5 

School-Level Subsidy Scheme 

To allocate according to the school’s level of need, or ability to raise revenues 

(rather than student-level need calculations), the allocation formula requires a measure of 

fiscal ability and educational need. The typical approach to this kind of allocation 

employs what is usually referred to as a “percentage equalizing formula.” In such a 

formula, the subsidizing level of government (presumably the Central Government in 

Thailand), shares in the total expenditure per pupil by a percentage that varies with the 

wealth or fiscal capacity of the local authority. Wealthy authorities receive a 

187

proportionately smaller share and poorer ones a greater share, up to some limit 

established in policy. 

To illustrate, suppose that the Government sets the maximum per pupil amount 

subject to sharing at 50,000 Baht per pupil. The percentage of the 50,000 per pupil that 

the Government pays for any school could be determined by a sliding scale-type formula, 

based on, say, the fiscal capacity of the highest quartile of authorities involved (as 

measured by income per capita, property wealth per student, proportion of poor students, 

or similar index). The formula for the per pupil amount for a school could then be 

expressed as: 

S = A|(1 - LC/SC)| [cannot be less than zero] 

Where: 

S 

A 

LC 

SC 

is the Central Government’s per pupil subsidy for the local authority involved. 

is the maximum amount of expenditure for which the Government will share (in 

this example 50,000 Baht). 

is the local capacity of the authority for which the calculation is made. 

is the standard fiscal capacity above which the Government policy is to not share 

(in this example the fiscal capacity of the highest quartile of authorities). 

With such a formula, the Government share for very poor (or low capacity/high 

need) authorities will approach 100 per cent or the standard amount, leaving very small 

amounts to be raised from local resources. The sharing proportion drops to zero for all 

authorities at or above the highest quartile boundary. By adjusting the standard fiscal 

capacity measure, the policy makers can adjust the distribution to better meet policy 

goals. 

188

Appendix 8 

Program Structure of the Education Budget 

Sector/Sub-Sector/Program 

8. Sector Education 

8.1 Sub-Sector: Education Administration 

8.1.1 Program: General Education Administration 

8.1.2 Program: Primary Education Administration 

8.1.3 Program: Secondary Education Administration 

8.1.4 Program: Vocational Education Administration 

8.1.5 Program: Teacher Education Administration 

8.1.6 Program: Non-Formal Education Administration 

8.1.7 Program: Religious, Art, and Cultural Administration 

8.1.8 Program: Higher Education Administration 

8.2 Sub-Sector: Education Service 

8.2.1 Program: Pre-Primary Education Service 

8.2.2 Program: Primary Education Service 

8.2.3 Program: Secondary Education Service 

8.2.4 Program: Vocational Education Service 

8.2.5 Program: Teacher Education Service 

8.2.6 Program: Non-Formal Education Service 

8.2.7 Program: Higher Education Service 

8.2.8 Program: Education for the Disabled and Lack-of-Schooling Children 

8.3 Sub-Sector: Educational Quality Improvement 

8.3.1 Program: Primary Education Quality Improvement 

8.3.2 Program: Secondary Education Quality Improvement 

8.3.3 Program: Vocational Education Quality Improvement 

8.3.4 Program: Non-Formal Education Quality Improvement 

8.3.5 Program: Higher Education Quality improvement 

8.3.6 Program: Health Promotion 

8.4 Sub-Sector: Fine Arts, Cultural, and Behavioral Study Promotion 

8.4.1 Program: Behavioral Study Promotion 

8.4.2 Program: Religion, Fine Arts, and Cultural Promotion 

8.5 Sub-Sector: Research 

8,5.1 Program: Research for Higher Education 

8.6 Sub-Sector: Academic Service for Public 

8,6.1 Program: Academic Service for Public 

8.7 Sub-Sector: Student Affairs 

8.7.1 Program: Student Affairs 

Source: Thailand’s Budget in Brief, Fiscal Year 1997. 

189

Appendix 9 

Private Sector Resource Mobilizing 

The issue of mobilizing private sector resources has been an important part of the 

policy dialog around reform. In reviewing the prospects for increased private sector 

funding for this project, it became apparent that the subject was a very large and complex 

one. This review examined the basic questions in as much depth as was possible within 

the terms of reference and available resources. The resulting findings on private sector 

resources add, it is hoped, a base of new knowledge and analysis that will contribute to 

policymaking and reform. 

However, it became clear in reviewing this topic that a more comprehensive study 

of this one topic, while beyond the scope of this task, is desirable. There is too little 

known about the full range of resource flows into the schools, especially from the private 

sector, This brief discussion of the topic is intended to add to the deliberations and point 

possible directions for further research. 

A comprehensive analysis of mobilizing private sector resources for education 

should be based in part on a model of the relevant flow. That is, there are many possible 

paths for financial resources to flow from private hands into one part or another of the 

educational system. The figure below is an attempt to show some of what could be 

significant flows. The figure identifies five distinct revenue sources, distinguished in 

terms of their possible interests or motives for incurring the costs of providing funds. 

These interests could include support for their own children, support for the community 

generally, for the school they attended, for business or public relations aims, for tax 

incentives, or simple altruism. Depending on their interests or aims, the revenue providers 

could direct their funds to at least five distinct targets, as shown below. 

Sources and Targets of Private Sector Resource Flows 

The “Private Sector” 

households with 

a 

public students 

b 


c 

private students 

d 


no students 

business 

sector 

not-for-profit 

sector 

k 

e 

f 

g 

i 

j 

l 

m 

h 

Targets of New Resources 

public 

students 

private 

students 

public 

schools 

old private 

schools 

new private 

schools 

190

Not all possible flows are show, since some seem to be implausible or low 

probability. This list is not meant to show the full detail of private entities, but to cover 

the major types. Households may have students in both public and private schools, for 

example, and some households are also business entities, etc. But these five components 

can be thought of as representing different interests in the educational system, and thus 

different motivations for increasing or decreasing the amount of financial support they 

extend to the schools. These varying interests would produce, in principle, different flows 

of resources to the different components of the school system depicted on the right side of 

the figure. So this figure is used to identify the most likely flows of resources from the 

private sector to education, given some assumptions about the use of the various 

component’s interests and the conditions under which mobilization of new resources is 

attempted. The size of these potential flows, the impacts on the targets, and the range of 

motivations are subjects that could receive further empirical study as part of the analysis 

and planning for reforms 

191

Appendix 10 

Household Expenditure by Region and Type of Expenditure, 

National Social Survey 

Average household expenditures by Region and Type of Expenditure 

Type of Expenditures 

Region 

BMA Central North Northeast South Nation 

Total expenditures 15,706 9,479 7,613 8,168 9,189 9,262 

% of National Avg. 170% 102% 82% 88% 99% 100% 

Food and beverages 4,530 3,042 2,288 2,413 2,969 2,830 

% of National Avg. 160% 107% 81% 85% 105% - 

% of Regional Avg. 29% 32% 30% 30% 32% 31% 

Alcoholic beverages 457 264 187 182 171 228 



Tobacco 203 180 129 115 177 152 



Clothing and footwear 588 367 380 401 527 428 



Housing 2,982 1,456 1,148 1,115 1,213 1,403 



Medical services and drug 570 362 286 256 478 355 



Travel and communication 640 228 233 228 260 275 



Entertainment 429 286 243 240 218 266 



Education and supplies 992 430 382 333 443 450 



Other 4,316 2,866 2,337 2,885 2,733 2,875 



Source: National Social Survey, 1996 

192

Appendix 11 

Results of Regression Analysis of Household Expenditure on Education, 

National Social Survey, 1996 

Regression Results: Model of Household Expenditure on Education 

R-Squared = 0.171 

Unstandardized 

Coefficients 

Variables B Std. Error Beta 

Constant 46.02 27.108 

Household size (# of members) 167.876 3.401 0.303 

Education of household head 33.981 1.421 0.156 

Money and in-kind income 5.36E-03 0.000 0.116 

Northeast region [1] -580.375 20.656 -0.278 

Area [2] 74.179 12.439 0.039 

Farming [3] -34.338 16.343 -0.017 

South Region [1] -467.954 22.160 -0.185 

North Region [1] -447.002 21.054 -0.2 

Central Region [1] -445.262 20.969 -0.198 

Household Head [4] -94.033 13.292 -0.044 

Non-farm and non-Prof. [5] 38.789 14.427 0.020 

Descriptive Statistics 

Std. 

Mean 

Variables 

Deviation 

N 

Household Total Expenditure on Ed. 450.14 938.93 25110 

Money and in-kind income 11802.31 20280.32 25110 

Household size (# of members) 3.60 1.70 25110 

Central Region [1] 0.23 0.42 25110 

North Region [1] 0.23 0.42 25110 

Northeast region [1] 0.28 0.45 25110 

South Region [1] 0.16 0.37 25110 

Education of household head 5.97 4.31 25110 

Household Head [4] 0.74 0.44 25110 

Area [2] 0.56 0.50 25110 

Farming [3] 0.33 0.47 25110 

Non-farm and non-Prof. [5] 0.44 0.50 25110 

Notes: [1] Dummy variable: region (1=region) 

[2] Dummy variable: area (1=urban) 

[3] Dummy variable: farming occupation (1=yes) 

[4] Dummy variable: household head (1=male) 

[5] Dummy variable: non-farm and non professional occupation (1=yes) 

Source: National Social Survey, 1996 

193

Appendix 12 

Provincial Wealth Rankings and Quartiles 

Province GPP/Capita Quartile Province GPP/Capita Quartile 

Sa Kaeo 2.12 1 Yala 43.75 3 

Amnat Charoen 3.50 1 Chai Nat 43.76 3 

Yasothon 9.36 1 Sing Buri 44.15 3 

Mukdahan 13.90 1 Trang 45.92 3 

Nakon Phanom 15.12 1 Suphan Buri 46.77 3 

Chaiyaphum 19.43 1 Pattani 47.42 3 

Nakhonnayok 19.71 1 Chumphon 48.41 3 

Kalasin 19.73 1 Lop Buri 48.55 3 

Srisaket 20.39 1 Ang Thong 48.64 3 

Nongbualamphu 21.10 1 Prachinburi 50.95 3 

Buri Ram 23.21 1 Satun 50.96 3 

Sakon Nakhon 23.63 1 Chiang Mai 54.12 3 

Nongkhai 24.15 1 Phetchaburi 55.51 3 

Chanthaburi 24.51 1 Krabi 57.35 3 

Ubonratchathani 25.27 1 Trat 57.89 3 

Phrae 25.67 1 Ratchaburi 60.14 3 

Loei 27.21 1 Songkhla 60.53 3 

Nan 28.13 1 Lamphun 60.84 3 

Phayao 28.21 1 Suratthani 61.37 3 

Phetchabun 29.28 2 Kanchanaburi 63.08 4 

Udon Thani 29.64 2 Phangnga 67.40 4 

Chiang Rai 30.11 2 Prachuapkirikhan 68.21 4 

Phichit 30.22 2 Mahasarakham 70.63 4 

Phatthalung 30.79 2 Roi Et 75.01 4 

Sukothai 31.01 2 Nakhonprathom 85.39 4 

Mae Hong Son 31.52 2 Nakhonratchasima 93.77 4 

Narathiwat 33.20 2 Ayutthaya 94.01 4 

Nakhon Sawan 37.95 2 Ranong 107.57 4 

Uttaradit 38.38 2 Nonthaburi 115.07 4 

Uthai Thani 39.00 2 Chachoengsao 125.74 4 

Khon Kaen 39.05 2 Saraburi 128.33 4 

Phitsanulok 39.59 2 Phuket 156.72 4 

Nakhonsithammarat 39.60 2 Samut Prakan 208.43 4 

Tak 39.63 2 Samutsakhon 220.72 4 

Kamphaengphet 39.91 2 Pathum Thani 247.78 4 

Surin 42.42 2 Rayong 282.33 4 

Samutsongkhram 42.57 2 Bangkok Metropolis 320.76 4 

Lampang 43.29 2 Chonburi 1,091.08 4 

194

Educational Finance in Thailand - UNESCO Bangkok

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