The Effects of Public Funding on Efficiency of Thai Public Higher Education Institutions: A Two-Stage Double-Bootstrap Data Envelopment Analysis

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. 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) because there will be more amount of budget available for efficiency improvement, allocation of investment budget should be at the highest consideration; (c) to improve teaching efficiency, HEIs should be encouraged to increase mobilization of resources by providing an incentive which makes clear about the benefits of educational support; (d) government proportion in total HEIs’ revenue should be increased to enhance research efficiency. Finally, the revolution of the public HEIs to an autonomous status should be strongly encouraged.