Economic Foundations of Expenditures in Higher Education Institutions

Abstract

Introduction/Main Objectives: analyze the economic foundations of expenditures in higher education institutions (HEIs), including their classification, role within the organization, and impact on the educational process. Background Problems: Making economically well-founded decisions is of great importance for ensuring the efficiency and stability of the higher education system, yet the concept of “expenditure” is defined differently in general, specific and economic senses, and its classification and presentation differ between state and non-state higher education institutions. Novelty: the article distinguishes the economic classification of expenditures between state and non-state higher education institutions on the basis of the Budget Code of the Republic of Uzbekistan, and argues that expenditures should be studied from a comprehensive perspective that considers both the institution and the student. Research Methods: a qualitative, normative-legal and comparative-analytical method is applied, based on a review of legislative acts (the Law of the Republic of Uzbekistan “On Education,” the Budget Code of the Republic of Uzbekistan) together with prior economic literature on expenditure and resource management in higher education. Finding/Results: the specific economic characteristics of the higher education sector (a labor-intensive, standardized, personal-service sector with limited possibilities for capital substitution and technological change) shape the structure of its expenditures. Budget-system expenditures are classified, according to Article 23 of the Budget Code, into four economic groups — wages, pensions, allowances, scholarships and material assistance; allocations for social needs; capital investments; and other expenditures — and, according to Article 22, into six classification structures (by source and level of funds, functional, program, organizational, economic and territorial). Instruments such as the state order and expanded financial independence are increasingly applied in financing higher education expenditures in both state and non-state institutions.