Educational Finance in Thailand - UNESCO Bangkok

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
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