Public funding system for Thailand higher education

Abstract

This study employs a two-stage double-bootstrap Data Envelopment Analysis (DEA) to evaluate efficiency of Thai public Higher Education Institutions (HEIs) and investigate the relationship between public funding and HEIs’ efficiency. The results from the first-stage analysis disclose a rather high level of average teaching efficiency score, but low level of average research efficiency score. From the analysis of scale efficiency, the findings reveal that teaching inefficiency of Thai public HEIs is mainly caused by inappropriate production scale. Contrarily, research inefficiency of Thai public HEIs is mainly caused by the ability to manage their resources for producing research but not the scale of production. The results from the second-stage analysis indicate that there are two important factors having positively contribution to teaching and research efficiency: the ratio of public funding to Full Time Equivalent Students (FTEs) and the degree of HEIs’ management autonomy and flexibility. Only budgetary factor negatively influencing on teaching and research efficiency is the percentage of HEIs’ investment expenditure. Besides, the government’s share in HEIs’ revenue has negative effects on teaching efficiency, but positive effects on research efficiency. This study, therefore, suggests to Thai government that (a) public funding to HEIs based on numbers of FTEs should be increased and mechanism to allocate public funding should be related to HEIs’ performance; (b) to improve teaching and research efficiency, HEIs should be encouraged to increase mobilization of resources by providing an environment and incentive which makes clear about the benefits of educational support; (c) the revolution of the public HEIs to an autonomous status should be strongly encouraged by: separating out the two roles of national government agencies in the HE Sector; aligning academic and non-academic autonomy; strengthening accountability mechanisms; creating the enabling environment for HE Reform. Finally, to improve HEIs efficiency the following specific changes should be implemented for inefficient HEIs to approach the best practices: improving teaching quality; improving faculty incentive and evaluation systems; constructing better align curricula and instruction with labour market needs; developing HEIs-based research efforts being consistent with individual institutional missions; and improving public-private and cross-border research partnerships.