Reorienting education spending better outcomes. Education Spending:.
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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.
High spending reflects high unit costs at all education levels relative to per capita GDP, which is twice as high in BiH as in Europe—unit costs at secondary and higher levels are especially high
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
and per pupil education spending
reflect differences between economic
development and fiscal capacities
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:
Efficiency must be increased in three priority areas:
expensive specialized secondary vocational programs must be gradually eliminated and replaced with general programs for which student:teacher 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
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.
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
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.
The following policy actions are necessary in the short term: