Relations between funding, equity, and efficiency of higher education

Abstract

Funding, equity, and efficiency of higher education are three dimensions of higher education that have been of increasing interest to scholars and policy‐makers during the past two decades in Europe and elsewhere. Analysing these phenomena and the relations between them is the main topic of this paper, considering the funding system as the basic issue. The paper presents each of three phenomena using a joint approach (definition of the phenomenon, its measurement, prevailing global world trends) and endeavours to explore the possibilities of measuring their mutual relationships.

Keywords:

• higher education
• funding
• equity
• efficiency

Acknowledgements

The authors thank Bruce Johnstone for helpful comments on an earlier draft of this paper. Thanks also to participants of the international conference ‘Funding, Equity and Efficiency of Higher Education’ (Portorož, Slovenia, 21–24 November 2007), where the paper was first presented.

Notes

1. The introduction and conclusions of this paper are based in part on the aims of the conference, prepared jointly by M. Bevc and B. Johnstone and presented on the conference website (http://www.fhe.fm‐kp.si).

2. More information about the project can be obtained from the project website: http://www.gse.buffalo.edu/org/inthigheredfinance/index.html (accessed August 2007)

3. According to them, this phenomenon also covers persistence in the education programme, completion (graduation), transition to higher levels/stages of HE, and success measured by the job that one can get with one’s degree (Bruce Johnstone has drawn our attention to this).

4. According to Psacharopoulos and Woodhall (1985) one of the purposes of introducing vouchers is to enable public funding of educational institutions without public supply of educational services.

5. The latest very useful classification can be found in valuable study on the social balance in private/public funding of HE (Schwarzenberger 2008). This classification includes three dimensions: public (originating in taxes or in relief from taxes) or private support (originating with parents); direct support (to students) and indirect (to parents); and cash (support that increases disposable income) and non‐cash (support that reduces expenses of important expenditure, such as food, lodging or transportation).

6. These key conditions are (Woodhall 1995a): efficient targeting of loans to the proper group of students; diminishing state subsidies in student loans with simultaneous limitation of indebtedness of loan recipients or, more precisely, future graduates; and minimising non‐repayment of loans.

7. In 13 countries with separate programmes of loans, in seven countries with combined systems of loans and fellowships, and in five countries with only fellowships (Eurostat 2007, 103).

8. See note 2.

9. For example, for Greece see Tsakloglou and Antoninis (1999) and for Slovenia see Bevc, Prevolnik‐Rupel, and Stanovnik (2001a). For studies in a more general context, see Psacharopoulos and Tilak (1991).

10. These relations have been elaborated more precisely by Bevc (1997, 1999).