Factors Affecting Efficiency of Public Education Expenditure, Evidence from Ethiopian Public Universities
Keywords:
Efficiency, data envelopment analysis.Abstract
This study evaluated how effectively selected Ethiopian public universities use their education budget. The research used a quantitative, explanatory approach with secondary data from the Ministry of Science and Higher Education, the Ministry of Finance, and the universities themselves. The entire population of public universities under MoSHE was the target. The study used Data Envelopment Analysis (DEA) to examine the efficiency of education spending. Data was analyzed using both static and dynamic panel data models. The researchers also used random effect panel data models to pinpoint specific factors that influence efficiency. The findings revealed that most of the universities in the study are relatively efficient when compared to their peers. The study identified university size and instructor workload as key factors affecting this efficiency. The researchers recommend that university administrators learn from their more efficient peers regarding resource management. They also advise the management to proactively manage the factors identified as affecting efficiency.
References
1) Afonso, A., & de Aubyn, M. (2005). Non-parametric approaches to education and health expenditure efficiency. European Central Bank.
2) Afonso, A., & Kazemi, M. (2017). Efficiency and effectiveness of public spending on tertiary education in the EU. Journal of Public Economics, 145, 1–13.
3) Afonso, A., Schuknecht, L., & Tanzi, V. (2010). Public sector efficiency: An international comparison. European Central Bank.
4) Anyanwu, J. C., & Erhijakpor, A. E. (2007). Education expenditures and school enrolment in Africa. African Development Review, 19(3), 395–411.
5) Bangi, G. K. (2014). Efficiency assessment of Tanzanian private universities using Data Envelopment Analysis.
6) Barnett, M. L. (2001). The company as a kaleidoscope of resources: A commentary on the resource-based view. Academy of Management Review, 26(4), 603–605.
7) Batare, L. (2013). Efficiency of public spending on education: A study on higher education in Latvia. (Unpublished master's thesis or dissertation).
8) Borger, B. D., & Kerstens, K. (1995). Cost efficiency in Belgian municipal governments. Regional Science and Urban Economics, 25(6), 661–692.
9) Chan, J., & Karim, M. M. (2012). Public spending efficiency: Evidence from Islamic countries. Islamic Development Bank.
10) Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operational Research, 2(6), 429–444.
11) Ehrenberg, R. G. (2004). Tuition, aid, and student access to higher education. National Bureau of Economic Research.
12) Erkoc, Y. (2016). Measuring efficiencies of Turkish public universities with non-parametric efficiency estimation method (DEA).
13) Ethiopian National Planning Commission. (2015). Growth and Transformation Plan II (GTP II) 2015/16-2019/20. Addis Ababa, Ethiopia.
14) Ghebru, H., & Holden, S. T. (2014). Efficiency and productivity differential effects of the Ethiopian land certification program. Land Use Policy, 37, 30–37.
15) Grant, R. M. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(3), 114–135.
16) Henri, J.-F. (2004). Performance measurement and organizational effectiveness: A behavioral perspective. Management Accounting Research, 15(1), 1–24.
17) Ileuma, B. S. (2017). School-related factors as predictors of internal efficiency of public university students in Nigeria's South-West. (Unpublished master's thesis or dissertation).
18) Izadi, H., Johnes, J., & Othman, S. (2002). Efficiency measurement in Malaysian higher education. Economics of Education Review, 21(6), 579–586.
19) Johnes, G. (2006). Data envelopment analysis and its use in the analysis of efficiency in higher education. Economics of Education Review, 25(1), 69–80.
20) Johnes, J. (1998a). The efficiency of higher education institutions: An international comparison. Routledge.
21) Moreno, S. R. (2017). Factors affecting public expenditure efficiency in developed countries. International Journal of Public Sector Management, 30(4), 392–410.
22) Nazarko, J., & Saparauskas, J. (2014). Application of the DEA method in the efficiency evaluation of public universities. Technological and Economic Development of Economy, 20(4), 748–763.
23) Pitan, O. S. (2012). The relationship between teacher/students ratio and students’ internal efficiency resources in Nigerian tertiary institutions. Journal of Education and Practice, 3(16), 1–8.
24) Solihin, B. M., Handayani, R., & Rahmawati, Y. (2017). Efficiency of government spending on education in Indonesia: A Data Envelopment Analysis approach. Journal of Economics and Sustainable Development, 8(1), 1–10.
25) Zotti, P., & Cristian, A. M. (2016). Analyzing the performance of departments and faculties in terms of research and teaching: An application of DEA and Malmquist index to the University of Salerno.
26) Note: The entries for Adema (2001), Daghbashyan (2011), Dong (2010), Foss (2012), Gul et al. (2014), Henderson (2003), Hibbert et al. (2013), and Trow (2007) were incomplete in the provided list. I have formatted them as well as possible based on the available information.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Mekonnen Mengistie, Ph.D. (Author)

This work is licensed under a Creative Commons Attribution 4.0 International License.









