Reorienting education spending better outcomes

1

• Reorienting education spending ? better outcomes

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Education Spending

• The extremely fragmented education system in BiH
  is expensive in terms of unit costs and
  inequitable in terms of who benefits from
  funding. High costs are leading to system
  breakdown (teacher strikes) and mounting arrears.
  Despite high spending, educational outcomes (the
  relevancy of what children learn) are thought to
  be poor.

3
Public education expenditures are high

• Education spending as a share of GDP is high in
  BiH, especially in the Federation of BiH,
  compared with average spending in transition
  CEECs and in EU countries

4
Unsustainable spending is driven by high unit
costs

• High spending reflects high unit costs at all
  education levels relative to per capita GDP,
  which is twice as high in BiH as in Europeunit
  costs at secondary and higher levels are
  especially high

5
The System is Characterized by Extreme
Inefficiency

• Higher Education is highly fragmented and poorly
  managed
• the cost per graduate in all higher education
  institutions is unsustainable reportedly, only
  15-20 percent of university students graduate on
  time far below European standards
• the fact that universities operate as loose
  associations of independent faculties leads to
  redundancy, inefficiency, and ultimately low
  quality
• the creation of separate universities for
  political reasons also creates redundancy and
  inefficiency, and is a major contributor to low
  quality programs
• managing higher education institutions at the
  canton level is inherently inefficient and
  ultimately unsustainable if quality is deemed
  more important than political ownership

6
The System is Characterized by Extreme
Inefficiency

• Expensive Secondary technical and vocational
  education is externally and internally
  inefficient
• External inefficiency over 50 of secondary
  children are locked into learning specific
  occupations for which there are no jobs rather
  than being given flexible skills for a modern
  economy
• Internal inefficiency occupational courses are
  expensive due to low studentteacher ratios and
  the need for specialized equipment

7
The System is Characterized by Extreme
Inefficiency

• Input-based funding (focusing only on teachers,
  books and materials) encourages inefficiency
• A focus on teachers has lead to salaries crowding
  out all other spending and low student teacher
  ratios
• The focus on inputs detracts from what is really
  important what students are learning
• A per student formula approach is needed to
  provide an incentive to use resources (teachers,
  school buildings, etc.) more efficiently

8
Public Education Expenditures are inequitable

• Wide disparities in per capita
• and per pupil education spending
• reflect differences between economic
• development and fiscal capacities
• Public spending for higher education benefits
  almost exclusively higher socioeconomic levels
  and people who will find the best jobs this
  inequitable situation is exacerbated by the fact
  that the best studentswho are strongly
  correlated with higher socioeconomic levels--are
  given free admission to university
• There are also wide disparities in the
  availability of academic or general secondary
  education the fact that over 50 of secondary
  students are enrolled in three year occupational
  programs which offer inflexible skills and
  limited potential for employment creates a
  vicious circle of poverty and unemployment

9
Public Education Outcomes and Quality are
Reported to be Low

• Curriculum and the structure of education are
  increasingly out-of-date
• The emphasis is on transmission of factual
  information rather than building skills and
  competencies and teach children how to learn
• As mentioned, the secondary vocational curriculum
  is excessively specialized and inflexible
• Students are tracked into academic and vocational
  streams at age 15 while European countries are
  rapidly moving away from such practice
•  

10
Public Education Outcomes and Quality are
Reported to be Low

• Enrollment rates in secondary are dramatically
  lowenrollment is about 57 at secondary in the
  Federation of BiH and much lower in RS, compared
  to well over 90 throughout Europe
• Little evidence-based information exists on the
  quality of programs a Standards and Assessment
  Agency has only recently been established to
  measure quality in general education, and
  accreditation and quality assurance is almost
  totally lacking in higher education
•  

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The Financial Dilemma

• According to the macroeconomic framework agreed
  with the IMF, recurrent spending in Bosnia will
  not increase over the next 3-4 years, and will
  only increase after that depending on future
  economic growth. Therefore, current levels of
  public spending on education in Bosnia will not
  grow in the medium term. At the same time
  enrollment rates for secondary and higher
  education must increase and quality must improve.
  Consequently, there are two options open to
  policy makers
• increase efficiency in secondary and higher
  education and
• increase non-public funding for education.

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Increasing Efficiency

• Efficiency must be increased in three priority
  areas
• expensive specialized secondary vocational
  programs must be gradually eliminated and
  replaced with general programs for which
  studentteacher ratios can be increased
• higher education must be funded at the State or
  Entity level, universities must be quickly
  consolidated under a European standard central
  management and the number of redundant programs
  reduced, and students must complete degrees
  faster
• the introduction of per student funding formulas
  at all levels must provide incentives for
  efficiency at all levels

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Message

• If politicians in BiH do not overcome their
  political differences and cooperate to reduce
  redundancy and increase efficiency, participation
  rates in secondary and higher education will
  continue to be below European standards and the
  quality of education will continue to be low for
  the foreseeable future.

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Non-Public Funding for Education

• Increasing non-public funding for education can
  be achieved by introducing fees for higher
  education FOR ALL STUDENTS WHO CAN PAY and
  introducing a loan scheme and scholarships for
  the poor, as well as encouraging both secondary
  and higher education institutions to find ways to
  supplement their revenue, which they are already
  in part doing

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Message

• Establishing universal fees for higher education
  and gradually increasing them over time is a
  necessity in BiH if the quality of higher
  education is to improve. There is simply no
  additional public funding with which to improve
  quality and increase enrollments. As nearly 50
  of students in the most prestigious faculties pay
  significant fees already, the political
  difficulty of such a policy change may not be as
  great as expected.

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The Reform Agenda

• The following policy actions are necessary in the
  short term
• Adopt State or Entity level management of higher
  education
• Transfer legal authority for university
  management from the faculties to the university
• Establish universal fees for higher education
  and increase them over time (together with a
  scholarship and loan scheme)
• Introduce per student formula funding mechanisms
  at all levels of the system
• Transform the 3-year occupational programs in
  secondary to 4-year broad-based programs
• On the basis of increased efficiency from the
  above reforms, increase enrollment in secondary
  and higher education and measure improvements in
  quality over time