Financing, resources diversification, private funds Daniel Münich (CERGE-EI, MŠMT)

TRENDS ~1995 – 1999~2000 – 2006 Slow growth of fundingFast growth of funding Growth of enrolmentRapid 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 StrengthsChallenges Normative funding formulaLack of transparency (should be costs not actual costs) Little emphasis on soc-econ needs Growing real funding per student Weight put also on graduation rateEffective 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 Information flows SchoolsStudents Government Firms Rules, goals, incentives setting Can we afford relying on smart central planning? Is there a space for disciplining competitive forces?