The application of the performance-based budget allocation mechanism to the higher education system in Vietnam

The application of the performance-based budget allocation mechanism to the higher education system in Vietnam

Nguyen Hoang Oanh Faculty of Economics National Economics University (Vietnam)
In Vietnam, the state budget is the main source of funding for the operation of public higher education institutions. With a limited state budget that is divided among many equally important spending purposes, the portion of the state budget devoted to higher education needed to be more modest. This makes it even more important to manage this scarce resource effectively. This paper addresses the performance-based allocation of state budgets for higher education. It employs a non-parametric method of evaluating relative efficiency using the two-stage data envelopment analysis CCR model under constant returns to scale to evaluate universities’ performance. The estimation results on a sample of 29 universities under the Ministry of Education and Training management for the academic year 2019-2020 show that the effective universities belonged to all single-disciplinary ones. Management was an important factor leading to the difference in efficiency scores between universities under study.
Higher education sector
state budget allocation
data envelopment analysis.

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