Public Expenditure in Universities in Argentina

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Working Paper N.8/03 Produced by the World Bank Office for Argentina, Chile, Paraguay and Uruguay Public in Universities in Argentina Marcelo Becerra Oscar Cetrángolo Javier Curcio Juan Pablo Jiménez July This publication was prepared and produced by the World Bank Office for Argentina, Chile, Paraguay and Uruguay. The series Working Papers does not constitute a formal document of the World Bank. It is informally published and distributed to promote discussion and comments from the community that works on the topics presented. The results, interpretations, judgments and conclusions expressed in this paper are those of the author or authors and should not be attributed to the World Bank, its affiliate organizations, the members of the Executive Board or the governments they represent. Working papers are available at: For comments and suggestions, please write to: pgiovagnoli@worldbank.org

2 TABLE OF CONTENTS 1. INTRODUCTION GENERAL CHARACTERISTICS OF THE ARGENTINE UNIVERSITY SYSTEM Characteristics of University Access and their Impact on Equity Public on University in the Educational Budget of Jurisdictions Private Universities UNIVERSITY BUDGET ALLOCATION AND EFFICIENCY University and Efficiency Allocation of Resources to National Universities INSTITUTIONAL DIVERSITY University by Institution Tentative Typology of Public Universities FINAL REFLECTIONS BIBLIOGRAPHY ANNEX I. EVOLUTION OF EDUCATIONAL EXPENDITURE ANNEX II. FINANCING SOURCES AND COMPONENTS OF UNIVERSITY EXPENDITURE ANNEX III. EXPENDITURE ON UNIVERSITY IN SELECTED COUNTRIES ANNEX IV. PRIVATE UNIVERSITIES ANNEX V. TYPOLOGY OF PUBLIC UNIVERSITIES ANNEX VI. INFORMATION BY INSTITUTION ANNEX VII. FINANCING IN THE HIGHER EDUCATION LAW ANNEX VIII. RESOURCE ALLOCATION PROGRAMS FOR NATIONAL UNIVERSITIES..79 ANNEX IX. UNIVERSITY FINANCING MECHANISMS Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 2

3 1. Introduction 1 The Argentine public university system has been historically characterized by two salient features: non tuitions and free access. Undergraduate careers are predominantly financed with public funds, without mechanisms to restrict the access of new students and the continuous expansion of total enrollment in general. Therefore, the system thus created is not equitable 2. Only one student from the lowest quintile out of eight from the highest is able to access university education. This situation becomes even worse when the data on graduates is analyzed, as wealthier students are those who survive until graduation, whereas poorer ones hardly manage to finish their university studies. Although it is true that part of the current graduates with high income levels come from low income families, and poor students who manage to graduate will rapidly move up the income scale, a significant portion of the population from the poorest sectors is excluded from the possibility to increase their income. Therefore, free access does not solve the restrictions posed by the selection process that takes place throughout elementary and secondary school and, of course, by the socioeconomic situation itself, which dramatically worsened in recent years. Another aspect that increases the inequity of the Argentine system becomes apparent when it is compared with the organization of the university system in other countries of the world. In the case of Argentina, the growing portion of private expenditure in the education total reveals a stronger presence of institutions that concentrate their activities on the most developed geographical zones, on fewer careers and on the population with the highest income. This situation reinforces the need to improve the quality of state universities and the effective conditions to access education they provide. In the last decade, public expenditure on universities grew more than the total public expenditure on education; the latter, in turn grew at a higher rate than total public expenditure, and all of these indicators grew over GDP. Furthermore, in the case of universities, total expenditure grew more than transfers from the national budget. Likewise, the enrollment rise experienced in recent years, which surpassed the growth of expenditure and was not supported by the necessary reforms for an adequate performance, reduced investment per student and generated serious problems to maintain the teaching quality. The system is highly inefficient, a characteristic that is revealed by the high dropout rates, the extension of the mean duration of careers and the extremely low graduation rates: only 18% of the students who enter university finally graduate, thus generating high per graduate costs. While in Chile university students graduate every year, and so do 78,000 in Colombia, in Argentina 45,000 students graduate annually, although the country s enrollment doubles Colombia s and is three times higher than Chile s 3. 1 The authors would like to acknowledge the valuable comments and contributions of Ariel Fiszbein, Lauritz Holm Nielsen, William Experton, Jamil Salmi and Carlos Abeledo. 2 Nevertheless, there are some isolated cases of quantitative or qualitative restriction on the admission of new students. For example, the Medicine career in the National Universities of Cuyo and La Plata has established some limits and there are some Schools with mandatory admission courses that condition the beginning of studies. 3 It is worth noting, the distinction between the total number of students and the number of effective or "regular" students, as it is discussed in detail in chapter 3 of the present work. The effective students total is much lower that the one reported by Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 3

4 A clear example of this situation are the results of a study on graduates from Public Accounting, Agronomy, Law, Pharmacy and Biochemistry, and Communication Sciences careers who entered university in 1990, which was carried out by the Secretariat of University Policy. This study reveals that on average, only 11.3 % of the students who entered university in 1990 was a graduate at the end of 1999, and needed, on average, 7.7 years to complete university studies 4. During the second half of the nineties, a series of changes were introduced into the system in terms of university assessment and accreditation of institutions and careers. The purpose of these measures was to provide orientation to potential and present students, and to the different sectors of society. By means of a National Law, the National Commission for University Assessment and Accreditation (CONEAU) was created. This entity is an autonomous body which is in charge of assessing public and private universities from an institutional perspective; accrediting graduate courses and undergraduate careers of public interest, and issuing recommendations on the institutional projects of new state universities and of private universities. This commission, which is working since 1995, is going through a strong legitimization process, and constitutes the first experience of this kind in Argentina. Similarly, since 1996 there is another line of innovation, which consists in the creation of a program to develop the University Information System (SIU), which will allow universities to provide reliable and transparent information. On the other hand, when the National Administration Budget Law for year 1992 was enforced, a change in allocation was introduced and a global transfer to national universities without any tie to specific expenditure was approved. Thus, the pathway for universities to achieve more autonomy and autarchy in the administration of their assets and budget was opened. Likewise, since it was created in 1993 to the present, the Secretariat of University Policies has tried to promote the creation of new mechanisms that introduce objective criteria to allocate public funds. For this purpose, a series of special financing programs was created with the aim of channeling all incremental resources of the system to transform the resource allocation model into one based on rational criteria, in the event of a strong budgetary expansion. These financing lines were introduced into the system with varying continuity and they never represented an important portion of national government transfers. Until 1998, when the largest proportion of treasury funds allocated to special programs based on objective criteria was recorded (equivalent to 7.6 % of the total funds transferred), it was observed that this share had a growing tendency. As from 1999, due to the fiscal crisis, incremental funds retracted and originated a drop in resources both in absolute current terms and also in relation to the total transferred. However, these important advances have not yet made a significant impact in terms of reducing the inefficiencies mentioned before. Therefore, the Argentine university system faces several challenges, many of which transcend the current fiscal restriction and are long dated. In this context, the purpose of the present study is to analyze the financing and expenditure of the Argentine public university system as an aggregate and by institution, with emphasis on the main aspects that define the efficiency and equity of the system, and presenting abundant information summarized by aggregate indicators to illustrate the diversity of situations. In this way, we expect to contribute to the Universities and published in statistics. According to the data that arises from the analysis performed in chapter 3, it is reasonable to suppose that the proportion of effective students from total students enrolled does not exceed two thirds of the total on average. This proportion varies greatly among institutions, and reaches very high levels in some of them. 4 The number of students admitted corresponds to the total number of students enrolled reported by Universities. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 4

5 debate on higher education reforms, although we understand that the topics discussed here are part of a wider debate that includes political economy, legal framework and institutional aspects. The report starts with a chapter on the general characteristics of the Argentine university system, where the most important accessibility and equity features are discussed. The chapter also includes references to the importance of public expenditure on university in the different government levels, and considerations on the importance of private universities. Chapter three presents an assessment of the efficiency of the system, and discusses the Argentine experience in recent years in terms of alternative mechanisms to allocate resources to universities. Chapter four discusses the evolution and structure of university financing and expenditure for each institution, and proposes a classification of public universities on the basis of some of the characteristics presented. In the final reflections, the argument of the report is reviewed, and new considerations on critical aspects of the future university policy in terms of efficient expenditure and financing are introduced. Finally, it is highlighted that, considering the diversity of topics approached and the convenience to discuss some matters related to the argument of the report -although they are not indispensable to understand it-, specific annexes for each of those topics have been included. The report is complemented by a statistical appendix. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 5

6 2. General Characteristics of the Argentine University System This chapter presents the general characteristics of the Argentine public university system, with emphasis on access conditions, their impact on equity, and the importance and structure of higher education expenditure in the budget of the different government levels, and its financing. Likewise, some introductory considerations on the importance of private universities are also made Characteristics of University Access and their Impact on Equity As it has been pointed out, financing for the Argentine public university system is predominantly public for undergraduate careers, without generalized mechanisms to restrict the access of new students and the continuous expansion of total enrollment. These characteristics are predominant in the system. Nevertheless, there are some very limited exceptions related to their scope and level. For example, the University of Tres de Febrero has implemented fees and Córdoba and Litoral National Universities charge a voluntary fee; in La Plata and Cuyo, on the other hand, there are restrictions on the access to the medicine career. Likewise, there are some schools which have implemented mandatory admission courses that condition the beginning of studies. Financing for graduate career, instead, is very different from financing for undergraduate courses. Although it is not the subject of study of this paper, it is worth noting that in most national universities, graduate courses and careers are financed by private funds derived from enrollment and course fees, which in some cases are even used to finance part of the expenditures of undergraduate course lecturing 5. The facility of access that characterizes the Argentine university system has not been able to avoid other important characteristics of the system: the conjunction of free access and inequity. The Argentine educational system is selective, and this process starts in secondary school and grows significantly in higher education, particularly in the university level 6. In order to illustrate this characteristic of the Argentine educational system, Table 1 presents the official estimations of the distribution of students in urban public schools by income quintile and by educational level in May It can be observed that in the primary level (or general basic education) 34% of students belong to households with lower income (first quintile), while the participation of this group in the university system is 5%. On the other hand, households with higher income represent 41% of the total students that attend public universities 7. 5 For example, some lecturers teach degree courses for a very low pay, which is compensated with much higher retributions from postgraduate level classes. This characteristic makes teachers salary policy more complex. We will go back to this point when we discuss university expenditure on staff. 6. According to Experton (1999) every 100 students who enter primary school in Argentina only half of them graduate from secondary school and less than 8 finish university studies. 7. The impact of the Argentine crisis is also shown by this indicator. In 1996, only 29% of university students belonged to households with higher income. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 6

7 Table 1 Percentage Distribution of Students in the Public Education System by Quintile of Family per Capita Income, May 2002 (Total for Urban Conglomerates) Educational Family Per Capita Income Level 1 Q2 i tile Total Prescho Primar ysecondar yhighe Tota runiversit l Source: Directorate of Consolidated Social s based on EPH-INDEC Table 2 presents some indicators that show that the slant against lower income sectors becomes severe in the secondary school level. It is observed that while more than 75% of the highest income quintile (the fifth one) completes secondary school, only 24% of the lowest income quintile (the first one) achieves this goal. These low graduation rates show that the poorest population has more probabilities to drop out, repeat grades or delay access to each educational level, what becomes a strong restriction on university access. Anyway, the high rates of delayed access to the secondary level experienced by the higher income quintiles denote a generalized deterioration of the quality of primary education, which reaches all socioeconomic levels. Table 2 Basic Secondary Education Indicators by Income Level Indicators Total Income Quintile Population aged14-18 not attending school (%) Mean dropout age School group aged 6-14: Delayed entry to primary school Delayed entry to secondary school Students who repeated at least one course Secondary graduates (ages 18-24) Source: Siempro - Secretariat of Social Development According to the data on secondary education, the percentage of students from the lowest quintile who attend university is six times lower than the number of students from the highest quintile (Table 3) 8. In spite of the fact that the population with university age in the lowest quintile is 30% larger, this indicates that only one student from the lowest quintile is able to access university education out of eight students from the highest quintile. This situation becomes even worse when we look at the data on graduates, as the 8. Considering only public universities, that relation is reduced to a 4.8. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 7

8 wealthiest students are those who manage to graduate, whereas poor students hardly ever finish their university studies. Although part of the current graduates with high income levels come from low strata, and poor students who manage to graduate will rapidly move up the income scale, a significant portion of the population from the poorest strata is excluded from the possibility to increase their income. Table 3 University Students and Graduates by Income Level Indicators (in percentages by quintile) Household with members aged (university age) 23. University Students 5. Public University Students 5. Households with one member graduated from university 0. Income 1 2 Quintile Source: Secretariat of University Policies based on data from the Permanent Household Survey (EPH) INDEC, 1999, and the National Directorate of Consolidated Social. To reinforce the idea of exception that the Argentine university system presents, we consider it necessary to introduce a brief comment on the type of regulations enforced by other countries. In the international context, the regulation of the selective process that leads to higher education is, in general, the competence of the State, with participation of regional governments in more decentralized countries. In terms of equity, this regulation should guarantee homogeneous access conditions to all citizens, independently of their place of residence, the secondary school modality they come from or the institution where they want to be admitted 9. Policies vary among countries. while in the main European countries mandatory tests to get a secondary school undergraduate are predominant, in Latin America national tests of academic aptitude prevail as an admission requisite 10. In many countries, there is a secondary level certification test (for example, Baccalaureate in France, Abitur in Germany, Maturitá in Italy), which at the same time gives students the possibility to access university studies, and in most of the cases, it is taken into account by universities to admit students. At the same time, in most countries the qualifications obtained throughout secondary school are considered as an element to be taken into account in the final qualification of the tests that are taken at the end of that cycle. Some authors consider that these qualifications are the best predictor of students' future performance 11. Conversely, in Argentina, unrestricted university access is combined with the lack of an exam at the end of secondary school, and thus access to Higher Education becomes totally deregulated. 9. For an analysis of the social and pedagogical conditions of access to higher education, see Kisilevsky (2002). 10. Table III. 1., Annex III, shows data on university entry regulations in various European and Latin American countries. It is observed that in all cases shown there is some kind of restriction, quantitative (limited vacancies) and qualitative (exam), to get a secondary school degree or to enter university. 11. See Kisilevsky (2002). Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 8

9 2. 2. Public on University in the Educational Budget of Jurisdictions In 2001, the national government, the provinces 12 and municipalities invested $ millions, which represent 4.9% of the GDP of that period. This figure implies an 83% increase with respect to the proportion of income allocated education in Nevertheless, in 2002, as a consequence of macroeconomic changes this proportion represented 3.5% of GDP and reflected a 29.4% drop in that ratio with respect to the previous year. As it is shown in table 4, the national level concentrates most of the expenditure on higher and university education 14, the provinces on basic education and municipalities spend exclusively on basic education. Nevertheless, more than one third of the expenditure on higher education is in charge of provincial government, and corresponds to the non-university portion of it. on this item also represents one fifth of total public expenditure on education. In order to analyze public expenditure on university within a more general context related to the evolution of expenditure on education in the last two decades, Annex I presents the most important features of that history, discriminated by jurisdictions and education levels. Table 4 Public on Education, Year 2002 (In %) Level National Provincial Municipal Total % Basic Education Higher Education and University Education and Culture not discriminated Total Source: National Directorate of Social Programming (DNPGS) Throughout the nineties, as opposed to the previous decade, public expenditure on university grew more than public expenditure on education; and in turn, the latter grew at a higher rate than total public expenditure and all of these indicators grew in their relation to GDP. In the case of universities, expenditure also grew more than transfers from the national budget (Graph 1). Nevertheless, as it was pointed out before, the behavior among institutions differed greatly, as it will be discussed in the next chapter. Graph 1 Relative Evolution of Public on University ( ) 12. When we refer to the Provinces we mean Argentina s 23 Provinces plus Buenos Aires City. 13. According to the data from the National Directorate for Social Programming (DNPGS). 14. Non-university higher education includes tertiary teacher training and technical education colleges, among others. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 9

10 (In constant currency. Index base 1991=100) GDP Total Public Consolidated Public on Education National Universities Total Transfers from National Government to National Universities Source: analysis based on data from INDEC, the National Directorate of Social Programming and the General Economic-Financial Coordination Office, Secretariat of University Policies. Measured by the evolution of total expenditure on national universities, in the period the system experienced an average annual growth of 19.3% in real terms, showing a 31.5% increase in 1993 with respect to the previous year. Later, as a consequence of the macroeconomic impact of the so-called tequila effect, there were two years of stagnation in the level of expenditure, followed by a new threeyear period ( ) of growth, which reached 8,3 % annually on average. As a result of this evolution, resources allocated to the national university system doubled with respect to their level in From then on, there was a growing adjustment of 0.6 % and 2.3 % in 2000 and 2001 respectively, which coincides with the general situation of the country. This drop increased dramatically in Although there is no official information on the level of product and public expenditure for that year, it is known that national government transfers to universities were, in real terms, 32.6% lower than in The expenditure increment experienced in the nineties meant a drop in the consolidated share of personnel expenditures in the total executed, which fell from 84.9 % in 1991 to 72.5 % in This reduction was compensated by an increment in the relative weight of transfers, which increased their share in This evolution is described in graph II. 1. of the Annex on financing sources and university expenditure. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 10

11 percentage points (mainly allocated to incentive programs for teacher-researchers, which are in force since 1993). The share of consumption assets and non-personnel services also improved, and grew from 9.3% of the total in 1991 to 14.4 % in on capital assets kept a 4% share throughout the period. Between 1991 and 2001 expenditure on salaries increased 75%, equipment and infrastructure grew 85% and expenditure on assets and services for the operation of universities more than tripled. On the other hand, transfers grew more than 13 times compared to their level in Therefore, in the period global expenditure increased 110.5% and during the last two years of this period, in contracted 2.9%. Concerning the composition of financing, 85% corresponds to transfers from the National Treasury, 10% to self-generated resources and 5% to other transfers, left-overs and other sources. Although there is no accurate information, it can be stated that institutions generate their resources basically by charging enrollment fees in the graduate level, through agreements with public bodies, and the remaining resources come from providing services and technical assistance, subsidies, donations, selling assets, etc. Consequently, it is worth noting that part of universities self-generated resources is public expenditure from other state jurisdictions different from the Ministry of Education. Chapter 4 describes the importance of self-generated resources by institution. In order to analyze the structure of public expenditure on university, Table 5 shows amounts executed by the entire system in 2000 in detail, considering the 36 national universities and the National University Institute of Art (IUNA). These values are discriminated by financing source and object of expenditure, according to the classifications established by the Secretariat of Economy. Annex II, on the other hand, offers a more detailed account of the structure of university expenditure and financing, and includes a brief explanation of the items in each component. A certain aggregate pattern of the rationality between financing and university expenditure can be observed at first. In fact, it is observed that most of the expenditure on personnel is financed by the National Treasury, although part is indirectly financed with self-generated resources; consumption assets purchases and non-personnel services are mainly financed with universities' self generated resources. Finally, an important portion of left-overs from previous budget periods is allocated to the purchase of fixed assets 17. Apart from these preliminary ideas, Annex II offers an explanation of the components of the different budget lines of university financing and expenditure. Table 5 Financing and of/in National Universities Composition by Source and Object (*) 16. Graph II. 3. shows that evolution in index numbers, with base in It has been decided not to include transfers in the graph to facilitate the perception of the other lines. Their index number for 2001 (with base 100 for 1991) is Only approximately one third of transfers are allocated to scholarships for students. Instead, more than half of them are allocated to additional salary payments through staff subsidies and scholarships for teaching staff, non-teaching staff or other type of incentives to teachers. 17 As it was said before, although there is no detailed classification of the resources that are self-generated by these institutions, it is evident that a good portion of them is used to face the operative costs of the services that generate them, and that universities keep just a margin. Anyway, depending on the discipline, the generation of these services also helps finance teachers retributions, laboratories maintenance, purchases of equipment that is necessary to improve teaching, etc. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 11

12 (In Millions of Pesos) Object Consump. Non-Personnel Fixed Transfers Total Structure Source on Personnel Assets Services Assets National Treasury 1, , % Self-generated Resources % Other Sources (#) % Total 1, , % Structure 73.2% 2.2% 11.6% 4.1% 8.9% 100.0% (*): Data from Closure Accounts reported by National Universities. (#): The following Financing Sources are included: Left-overs from Previous Budget Periods, Internal Transfers, External Transfers, Internal Credit and External Credit. Source: Secretariat of University Policies, General Economic-Financial Coordination Office. Concerning expenditure on personnel financed by the Treasury, although it is not the central topic of this report, it is worth noting that there are non-salary incentives for teaching staff of National Universities, which could represent a higher level of expenditure for these institutions, as a more or less significant group of university teachers, depending on the disciplines they teach and where they are located, gets a number of benefits that are included in their salaries, without which they would not want to provide teaching services. Among these incentives, the following can be mentioned: - the possibility to work in research projects financed by CONICET, which complement their University salaries; - the social coverage they receive for holding a teaching position, independently of how many hours they teach; - greater flexibility to develop other public work activities that are currently incompatible with teaching positions, as established by the hiring regime; - professional prestige, as it is evident in careers such as law, architecture, or health sciences; depending on the region where teachers are located, this aspect contributes to acquiring high social status. Finally, the complexity of teachers salary policy in many universities is increased by the great differentials of existing salaries between undergraduate and graduate levels, which in many cases work as cross subsidies between studies that have private funding and those that are basically financed with public funds Private Universities Although that the focal point of this report is the analysis of public sector expenditure on university, and that the information available on private universities is scarce, this section includes some considerations on them, which will serve as a framework and will complement the arguments that will be presented in the rest of the document. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 12

13 In Argentina the number of university institutions that do not receive public subsidies, usually called private, grew steadily during the decade of the nineties. In 1985, there were 20 private universities which coexisted with the 26 public universities. Table 6 shows that, in 2000, there were 50 active private university institutions (42 of which are universities), which represent 54.9 % of the system. Table 6 Amount of University Institutions and Students by Sector, Year 2000 Institutions Total Public Private Private/Total Universities % University Institutes % Total University Subsystem % Total Non-University Subsystem % Total Higher Education System % Students Total Public Private Private/Total University Subsystem 1,285,361 1,120, , % Non-University Subsystem 439, , , % Total Higher Education System 1,725,270 1,374, , % Source: Secretariat of University Policies (SPU) The increased share of private institutions in the total was accompanied by a more slowly paced growth of enrollment. In 1985, private universities had 70,953 students. In 1992, the number of regular students reached 105,062, and since 1998, it remains at around 166,000 students, a little less than 13% of the total, as it is shown in graph As it can be observed in the information presented in Annex IV, throughout the nineties, private universities concentrated a participation which varied between 10% and 20% of total universities students. At the same time, since 1994 these institutions improved their participation with respect to graduates, generating 27.1% of the total university graduates of the country in Finally, it is interesting to point out that 76.6% of the students who attended private universities in 2000 live in the City of Buenos Aires or in Buenos Aires Province. Conversely, public universities show a stronger presence in the interior of the country. Half of the students who attend public universities belong to those interior jurisdictions. Graph 2 Evolution of Enrollment Composition by Public and Private Universities 18 Annex IV presents a more detailed analysis of the presence of private universities in the Argentine university system. On the other hand, Annex III presents some references on this respect in relation to OECD countries. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 13

14 100% 70, , , , , , , , , ,539 90% 80% 524, , , , , , , ,000 1,054,014 1,124,044 70% 60% 50% 40% 30% 20% 10% 0% Public Universities Students Private Universities Students Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 14

15 3. University Budget Allocation and Efficiency This chapter presents the basic aspects for an assessment of internal and external efficiency. Additionally, the chapter includes a presentation of the different criteria introduced in recent years to improve transfers from the national government to universities University and Efficiency The Argentine public university expenditure experienced a formidable increase in real terms during the nineties. As it is inferred from chapter 2, in that period, the growth rate of this indicator surpassed those corresponding to consolidated public expenditure on education, total public expenditure in all government levels and country Income. As from 1999, this tendency moderately reversed, and during 2002, it experienced an abrupt fall in real terms as a result of the devaluation of the currency. In this context, the present section aims to explore the efficiency of university expenditure in this period, both from the perspective of higher education institutions and of society as a whole. External Efficiency According to Salmi et al (1994), the external efficiency problems experienced by higher education institutions in developing countries can be summarized by the difficulties of graduates to access the labor market and by the deficiencies of the research developments carried out by these institutions. This study indicates that in these countries, the unemployment of the population with higher education increased from the eighties on, as a consequence of the labor market distortions caused by official policies that lead to an overestimation of the personal benefits derived from higher education. On the other hand, financing for this educational level, which is not planned through enrollment rationalization mechanisms, contributes to turn certain careers economically attractive (high private return rates). These careers belong to disciplines for which later on labor demand becomes insufficient. Concerning the difficulties related to research, it is noticeable that in many Latin American countries research activities carried out by Universities are not usually intended for practical applications, a fact that reflects the traditionally low level of interaction between the university and the industry. Additionally, during the period discussed, public and private financing for research and development successively decreased in these countries. To solve these deficiencies, in 1994 Argentina launched an incentive program for teacher-researchers, by means of which university teachers are rewarded according to the time they dedicate to research projects that are periodically monitored (we will go back to this point in the section on allocations of specific resources). Likewise, during the second half of the nineties, a series of changes related to the assessment and accreditation of institutions and careers, and the development of information systems to improve the quality and availability of the information and its transparent distribution, were introduced with the aim of providing orientation to current and potential students and to the different sectors of society. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 15

16 By means of a National Law, the National Commission for University Assessment and Accreditation (CONEAU) was created. This entity is an autonomous body which is in charge of assessing state and private universities from an institutional perspective; accrediting graduate courses and undergraduate careers of public interest, and issuing recommendations on the institutional projects of new state universities and of private universities. This commission, which is active since 1995, is going through a strong legitimization process and constitutes the first experience of this kind in Argentina. Similarly, since 1996 there is another line of innovation, which consists in the creation of a development program for the University Information System (SIU), which will allow universities to provide reliable and transparent information. This program designed information systems that are being deployed in the university system and that provide higher information availability. Internal Efficiency From the point of view of the internal efficiency of the system, it is important to note that the strong increase in university expenditure was accompanied by a marked rise in enrollment. Since 1980, when information on enrollment became available, the total number of students in the national university system rose until As it is shown by Graph 3, the pace of this process can be divided into four distinct periods: , a period of moderate growth: during the last years of the military dictatorship and the gradual restoration of freedoms, there is a gradual annual cumulative increase of enrollment that reaches 2,3%; , a period of marked growth due to the restoration of democracy: there was a clear policy of mass access to higher education. In fact, the number of students admitted to the system rose at rates close to 100%, which meant an increase in total students of 31.2% in 1984, and 18.3% in 1985 compared with the previous year. The annual cumulative enrollment growth rate reached 24.6% , a period when the growth rate fell: as from 1986, the number of students who accessed the system became stable and determined an annual cumulative enrollment growth of 7,6%, three times the rate recorded for the period that was previous to the return of democracy; , a stable period: the number of admitted students remains approximately constant at around 170,000 students,,and determines an annual cumulative growth of 0,7% for the period; : sustained growth. The number of students admitted increases at an approximately constant rate, originating a rise in total enrollment that reaches an annual cumulative level of 7.3 %. According to data reported by National Universities, the total number of students includes entry-level students (new students) and re-enrolled students who started career courses in previous years. The data from year 2000 shows that 28% of the 834,799 students who re-enrolled, (representing 74.3% of the students reported for the entire system -1,124,044-], did not approve any subject in the previous year. Consequently, to analyze the enrollment of the system it is necessary to take into account not only the total number of students but also the number of effective or "regular" students. However, from the point of view of the efficiency of expenditure, that portion of the non-regular students who enrolls in courses and Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 16

17 attends classes or approves only one subject contributes to increment expenditure by the generation of courses and consequently, of teaching hours. Taking into account the interpretation of regular students established by the Higher Education Law (LES) 19, deducting students who re-enrolled in 1999 and approved less than two subjects in that year, it can be said that in 2000 the number of active students in the system was 802,718 (28.6% less than the total reported by universities). This figure can still be overestimated, as a more or less significant proportion of the 289,246 students who were admitted in the system in that year may not have reached the minimum performance expected 20. The data presented in Annex VI shows that some university institutions have a proportion of inactive students (supposing that the total newly enrolled students are effectively studying) which is close to 40% of the total reported 21. On the other end, there are universities that show very low rates of inactive students Article 50 of the Higher Education Law states that Each institution will dictate norms on the regularity of studies, and these norms will establish the minimum required academic performance, and should foresee that students must approve at least two (2) subjects per year, except when the study plans includes less than four (4) annual subjects, in which case students are to approve at least one (1) subject. In universities with more than fifty thousand (50.000) students, the admission, permanence and promotion regime will be defined by each School or equivalent academia unit. 20. Some universities declare all new students enrolled, even when some of them have never attended classes or sit for exams. 21. That is the case of Catamarca, Jujuy, Salta, Northeast and South National Universities. 22. These are the National Universities of Gral. San Martín (4.4%), Gral. Sarmiento (4.7%), Villa María (5.7%) and Quilmes (7.6%). Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 17

18 Graph 3 Students, New Entrants and Graduates from National Universities Years ,200,000 1,000, , , , , Students New entrants Graduates Source: analysis based on data from SPU. Going back to the evolution of these variables since 1980, we can observe that the number of graduates in the system did not follow the previously described growth in enrollment. This situation can be explained by the extension of the mean duration of careers and the failure of students who are not able to complete their studies. According to a study performed by the SPU on the graduates from the 1990 cohort admitted to universities for the Public Accountant, Agronomy, Law, Pharmacy and Biochemistry, and Communication Sciences careers 23, which looks at the number of students who graduated from that cohort every year till 1999 (see Annex VI), on average only 11.3 % of students had graduated at the end of 1999, and required, on average, a period of 7.7 years to complete their studies. Among the careers for which this study was performed, the worst performance corresponds to the Communication Sciences, as the report indicates that ten years after the beginning of their studies, only 178 students had graduated (7.2%) out of 2456 students who enrolled in In this respect, performance 23. The study does not include information about the Universities of Buenos Aires and La Rioja, as it was not received from these institutions when it was requested. Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 18

19 varies among universities too: while 17 % of the students of this career graduated from National University of la Plata during the period reviewed, only 1% graduated from National University of Comahue and National University of San Juan. Additionally, the study estimates the possibility of having new graduates from that cohort as from year Taking into consideration the econometric calculation based on the evolution of graduates until 1999 and the number of re-enrolled students in year 2000, it can be concluded that 998 students in this cohort are likely to finish their studies in the next 10 years, representing an additional proportion of 2.6% of the students enrolled in 1990, which raises the final success rate to 13.8% for the average of the selected careers. Therefore, independently of the time the students remain in university, more than 85% of the students will not be able to complete their studies successfully. The number of graduates per newly enrolled student is another indicator that lets us measure the internal efficiency of higher education institutions. Assuming that the theoretical duration of careers is equivalent to five years on average, the evolution of this ratio for the Argentine public university system since 1980, is presented in detail in Table VI. 3. This indicator describes an abrupt fall in students success during the period, as in the mid-eighties graduates represented approximately 60% of the corresponding new students and at present they are less than 20% of the students who enroll for the first time. The different institutions show a high undergraduate of dispersion with respect to the performance of their students (see table VI. 4). Recalling that during 1995 a series of institutions had not been created yet, the performance of Sur, Cuyo and Entre Ríos National Universities draws our attention, as these institutions show graduate per new student rates that are beyond 30 %, and almost double the average of the system. The situation of the National University of Quilmes deserves special mention, as out of 865 new students enrolled in 1995, 583 (67.4%) finished their studies in On the other hand, the National Universities of La Matanza, Jujuy, Salta, Santiago del Estero, La Rioja, Formosa and Mar del Plata appear as the most inefficient ones in this respect, showing proportions that are below 10 %, and imply performances that are 50% lower than the system average. It may be interesting to link the indicator presented in table VI. 4 (graduates as a percentage of new students in each university) to the typology that will be developed in the next chapter, and by means of which we will classify National Universities into Large, Small, Medium size, Universities with High Mean and Recently Created Universities. Following that line, we observe that "small" universities have the lowest indicator, with five cases below 10% (La Matanza, Jujuy, Salta, Santiago del Estero and Formosa). The only small university with a high percentage of graduates is Entre Ríos (33.2%). Recently created universities also show low percentages, although in this case this is explained by their own nature. Nevertheless, as it will be observed, the University of Quilmes shows a totally exceptional indicator. As expected, medium size universities have indicators that are close to the mean of the system, without much dispersal among the different cases. Unlike medium size institutions, "large" universities present very disperse indicators, from 11% for UTN to 36% for University of Cuyo, although their graduate/new student ratio is higher than the mean. Finally, it is interesting to observe the high percentages of graduates in two of the universities with high mean expenditure (Centro de la Provincia de Buenos Aires University and Sur University). Other efficiency indicators that are worth considering are per student and per graduate total expenditure incurred by university institutions. As the total expenditure series for the period under consideration for this work is not available, and taking into account that, as it has been pointed out, National Treasury Public in Universities in Argentina. By Marcelo Becerra, Oscar Cetrángolo, Javier Curcio and Juan Pablo Jiménez. 19