Financial Decentralization and Higher Education From an Economic and Educational Perspective

Document Type : Research Paper

Authors

1 Ph.D. Department of Economics, Faculty of Management and Economics, Lorestan University, Khorramabad, Iran

2 Associate Professor, Department of Economics, Faculty of Management and Economics, Lorestan University, Khorramabad, Iran

Abstract

The growing demand for higher education since the mid-1990s has led to the expansion and diversification of the higher education system. The market economy requires more attention to the quality of education, which is largely related to the amount of budget for each student. Education not only stimulates total factor productivity and economic growth, but also helps to tackle some of the major social and environmental challenges. Beyond economic growth, education enables the production of more and new goods and services with less consumption of non-renewable resources and reduces the negative externalities associated with production. The uniform and one-sided provision of education under the supervision of the centralized system may cause lack of competition and inefficient use of public resources. In this regard, this research seeks to examine the relationship between financial decentralization and improving the performance of higher education in the provinces of Iran. To obtain the relationship, the panel data estimation method for the period 2006 to 2019 has been used. The results showed that the effect of income decentralization on the number of university graduates is positive and significant. In other words, income decentralization increases the number of graduated students and increases the quality level of universities. Also, the effect of income decentralization on educational per capita is negative and meaningful. This means that increasing income decentralization has reduced the per capita education of students, which in turn reduces the quality of education in universities. Anyway, the cost-decentralization relationship is not meaningful in both estimated models.

Keywords

Main Subjects

References

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