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 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
Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 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
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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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Description of flows of financial i
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(teachers, facilities, etc) if data
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Table 4: Continued. Content of curr
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Table 5: Assessment of information
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An assessment of information system
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general administration, these syste
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Recommendation for IS Most involved
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6. The nation wide implementation.
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References Office of the permanent
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Office of private education commiss
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Interviews 10 September 1998, 9:00-
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Appendix 2 Projections of Costs of
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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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