2010 Volume 9 Pages 109-119
Despite the importance attached to the recent debate about the necessity of further educational expenditure, questions such as “Does money matter?” and “Under what conditions does money matter?” have never been adequately examined in Japan. This article quantitatively analyzes the efficiency of the educational expenditures of Japan and other developed countries.
The analyses were conducted by a two-step procedure. First, on the basis of Organization for Economic Co-operation and Development (OECD) expenditure data and Program for International Student Assessment (PISA) data, the effect of the expenditures on primary and secondary education and the inefficiencies of OECD countries were estimated, by employing a semi-parametric stochastic frontier model. The estimated values of inefficiencies were interpreted as differences from the best practice. Second, a regression analysis of the determinants of these inefficiencies was conducted. The supposed explanatory variables of the inefficiencies were school autonomy, external evaluation. The following are the main results of the analyses.
An increase in educational expenditure has some effects on educational outcome. However, this does not necessarily suggest more investments in education. The estimated inefficiencies of each country suggest that there is considerable room for improvement for some countries, including Japan, wherein the magnitude of the inefficiencies can be reduced. Therefore, increasing the educational expenditure may be relatively expensive.
The key determinant of inefficiencies is the institutional setting of school autonomy, which is related to the school curriculum, fiscal resources, human resources, and so on. An improvement in school autonomy substantially decreases inefficiency. In addition, its effect is contingent on the degree of strength of external evaluation. The existence of external evaluation heightens the effect of school autonomy.
