Financing, resources diversification, private funds Daniel Münich (CERGE-EI, MŠMT) TRENDS ~1995 – 1999 ~2000 – 2006 Slow growth of funding Fast growth of funding Growth of enrolment Rapid growth of enrollment Real per student funds fell 26% Growing real funding per student Spending per student still bellow 1995 CR levels and bellow OECD average Lack of private funding ..and efficiency of spending? STRENGHTS &CHALENGES Strengths Challenges Normative funding formula Lack of transparency (should be costs not actual costs) Little emphasis on soc-econ needs Growing real funding per student Weight put also on graduation rate Effective control of budgets and allocations within institutions Development programs (competitive) Over-reliance on public funding Small share of private providers OVER-RELIANCE ON PUBLIC FUNDING • Private funding from: – Students (domestic, EU, non-EU) – Firms (R&D, innovations, students) – Other • Consequences – Constraint of faster growth of the system – Inefficient behavior of students and schools (incentives) …introduce fees and attract private sector FRAMEWORKS FOR PRIVATE FEES/TUITION (1) • Student loan system, need-based scholarships • Differential fees by level of studies – BA, MA, foreign students: pros & cons, Irish experience? • Encourage growth of private tertiary sector – make students eligible for public loans/scholarships – real estate endowment (?) FRAMEWORKS FOR PRIVATE FEES/TUITION (2) • Dual fee system – Charge more market based programs, non-EU students. – Higher tuition subsidies (public) to priority fields • Parallel fees structures – not recommended • Attract support from industries (students and R&D) REFORM OF FINANCING • Current funding mechanism – streamlined and transparent – according to normative (current) costs) (?) – according to labor market needs (?) – more responsive to soc-econ needs (?) – consolidate graduate-base component – who will decide? – is there a space left for customer’s preferences and competitive forces? • Greater governance power to management – priorities setting (feedback?) – allocation of funds INCENTIVES, INFORMATION, COMPETION Government Rules, goals, Information flows incentives setting Schools Students Firms Can we afford relying on smart central planning? Is there a space for disciplining competitive forces?