Educational Finance in Thailand - UNESCO Bangkok

Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA
Education Management and Finance Study July 1999
The details of how this municipal-level decentralization is eventually decided will
not materially affect the operation of the finance scheme described here.
3.2.2. Allocation issues
a. The Basic Educational Support Program is intended to provide a foundation of
financial resources across institutions. Thus the amount of the allocation for each
level of the education system will be different, depending on the determination of
the appropriate amounts for each. The Basic Education Support allocations within
each level should be in the form of block grants to each institution based on the
number of students in effective attendance. The issue of how to determine
effective attendance is taken up in a later section. The base amount of the support
will be calculated as 80 per cent of what is judged to be the appropriate level of
recurrent expenditure per student for each level or type of educational institution
(primary, lower secondary, upper secondary, higher education, etc.). The section
on per-student expenditure analysis describes the recommended approach to
setting an appropriate level of basic per student support. Since this basic support
level will not be sufficient for program operation in most cases, and is not
responsive to local needs and circumstances, there should be additional allocation
and revenue generating mechanisms to make up a comprehensive finance system.
Part of this additional funding is dealt with through the Educational Equalization
Program. Other resources are provided for through local revenue raising. These
mechanisms are described in Section 3.2.3 below.
b. Before describing the details of the allocation mechanisms, the nature and
implications of the block grant approach require some discussion. This kind of
mechanisms is, in some respects, a major departure from the current budget
allocation and control method (the line item budget). As the term is used here
“block grants” to the institutional level mean that the discretion and control of
resource allocation to the various programs and objects of expenditure are
transferred from the national to the local level. It also means, therefore, that the
major responsibility for the efficient and effective use of those resources shifts to
that level as well. This approach means that the educational finance policy issues
at the national level shift as well. Instead of attention to distribution across
Ministries, Departments, and agencies, the policy debate will necessarily focus on
the appropriate levels of support for education, the operation of the allocation
mechanisms, and the priorities for assessment, research, and improvement. That
is, the importance of the role of the national government does not diminish, but
rather shifts more directly to allocative and performance issues.
c. In one respect, the block grant approach is not as large a departure from the
status quo as it might appear on the surface. The existing budget allocations are
based in large part on incremental adjustments to the allocations requested by the
lower levels of the system. Therefore what emerges as the line item budget for any
particular institution reflects important inputs from that local level. So the original
allocation is quite likely to reflect, at least in some ways, the allocation decisions
and preferences of the local administrators. The main difference under the block
grant scheme is that the local authorities have the discretion to adjust their local
budget from the block grant to more closely fit local needs and circumstances.
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