Educational Finance in Thailand - UNESCO Bangkok

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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
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- Volume II/3 - Educational Finance
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mission and operations. The term
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The information requirements for fi
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Table 1: Continued Dept. Flow of Re
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Table 1: Continued Dept. Flow of Re
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Description and assessment of compu
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Table 3: Existing computer systems
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Table 3: Continued Current existing
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Page 157 and 158: Interviews 10 September 1998, 9:00-
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Page 163 and 164: Identification of Schools for Sampl
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Page 169 and 170: Figure 1: Thailand’s Development
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Page 175 and 176: 2.31 Questionable quality of educat
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Page 191 and 192: References Chalongphob Sussangkarn
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Page 199 and 200: Not all possible flows are show, si
Page 201 and 202: Appendix 11 Results of Regression A
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