Educational Finance in Thailand - UNESCO Bangkok

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
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