Educational Finance in Thailand - UNESCO Bangkok

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Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 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
Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 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
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- Volume II/3 - Educational Finance
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Table of Contents A. Executive Summ
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Table of Tables Table 1 Adjustments
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Figure 18 Figure 19 Figure 20 Figur
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Projected Cost Increases for Expand
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Identification of Schools for Sampl
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8. Please place an X in a box below
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enrollment as a whole growing at an
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Figure 1: Thailand’s Development
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Table 5: Crude transition rates of
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and level of education, 1993 and 19
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2.31 Questionable quality of educat
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income inequality between agricultu
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4.1.4. The percentages calculated f
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Table 11: Public and Private sector
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4.3.8. As would be expected, unempl
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5.7 The dilemma is to balance the s
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Table 14: Unemployment and Underemp
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there any activities that would be
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References Chalongphob Sussangkarn
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Appendix 6 BMA Voucher Policy A. Lo
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Appendix 7 Finance Allocation Metho
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Appendix 8 Program Structure of the
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Not all possible flows are show, si
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Appendix 11 Results of Regression A
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