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The Performance of Universities in North Rhine-Westphalia Comparison of a Distribution Solution and the Performance Criteria of a Data Envelopment Analysis

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The Performance of Universities in North Rhine-Westphalia Comparison of a Distribution Solution and the Performance Criteria of a Data Envelopment Analysis The Performance of Universities in North Rhine-Westphalia Comparison of a Distribution Solution and the Performance Criteria of a Data Envelopment Analysis Günter Fandel, Hagen* A. Introduction In the last few years a variety of approaches have been developed for recording the efficiency and the success of universities (HIS 1997, A9/97 and A10/97; Wüstemann et al. 2000; Andersen et al. 2001; Ziegele 2001). The purpose of this is the distribution of funds among universities on the basis of performance and success. The present concept of budget distribution among universities in North Rhine-Westphalia allots correspondingly more funds to universities with higher numbers of students in the first four semesters and a larger number of academic personnel, with otherwise the same number of graduates, and to those with higher outside funding expenditure with otherwise the same number of doctorates (Fleischer 1997). This has the effect of rewarding poorer input-output shares, which is not exactly sensible from the aspect of the efficient output of services. In addition, the aggregation of figures over all subject groups in a university, i.e. by looking at their totality, hides the subject groups are characterised by the efficient output of services and those are not. The redistribution criteria that are used can be interpreted on the other hand as input or output variables and therefore be used as elements of a Data Envelopment Analysis. The different subject groups in universities in North Rhine-Westphalia, and the universities as a whole, can then be studied with regard to the relative efficiency of their output of services in this year on the basis of the same data material towards which the redistribution was oriented in 1997. These results of the efficiency analysis can then be compared directly with those of the redistribution, to examine how far the redistribution was economically rational, i.e. was in harmony with the performance criteria. * Prof. Dr. Günter Fandel, Lehrstuhl für Betriebswirtschaft, FernUniversität, Universitätsstraße 41, D-58084 Hagen. E-Mail: [email protected]. I would like to thank in particular my academic assistant Dipl.-Kfm. Steffen Blaga for his support for the calculations. 2 It is not intended to discuss further here the output of services by universities from a general theory of production aspect. This would go beyond the boundaries of the arguments in this paper. For analyses of this type from the aspect of content and perspective see Albach et al. (1978) and Fandel/Paff (2000) and the literature referred to there. B. Performance-oriented redistribution of funds for teaching and research among the universities in North Rhine-Westphalia I. Redistribution At the behest of the parliament of North Rhine-Westphalia the Ministry of Science and Research started a redistribution among the region's fifteen universities of part of the funds available for teaching and research on the basis of defined performance and success criteria. In 1997 the redistribution budget amounted to DM 148.58 million and was provided by the universities themselves from their own funds for the appropriate title groups for teaching and research. The criteria used as the basis for the distribution were different for the two areas of teaching and research. For teaching they were: (1) the shares of posts for academic personnel, (2) the shares of students in semesters 1 to 4; in deviation from this in the case of the FernUniversität in addition half of all part-time students in semesters 1 to 8, because, together with their occupations, they have double the standard length of study with half the study load, in comparison with full-time students, and (3) the shares of graduates, with the analogously modified conversion of the graduates in part-time degree courses at the FernUniversität as under (2), in the respective universities, whereby (a) to calculate the numbers or shares under (1) to (3) the subject groups Humanities and Social Sciences, Natural Sciences and Engineering Sciences were weighted in the ratio 2:5:5, and (b) the numbers or shares of graduates for the calculation under (3) were discounted in dependence on the length of time by which the graduates had exceeded the standard length of the degree course. 3 The following criteria were used for the redistribution to record performances and successes in research: (4) the shares of third-party funding and (5) the shares of doctorates in each university, whereby (c) a moving average for the last three years was determined for the shares of third-party funding under (4), and the subject groups Humanities and Social Sciences, Natural Sciences and Engineering Sciences were given a weighting of 7:2:1 for their third- party funding, and (d) the subject groups were given the weighting shown under (a) for the shares of doctorates. Medicine is not included in this redistribution, and also remains outside all further considerations. The data on (1) referred to the sum of the academic personnel in the universities over the years 1993 to 1995, ascertained in each case on 1 October in each of these years. The data for (2) were based on the surveys for winter semester 1995/96. The figures for (3) and (5) resulted from the sum of graduates and doctorates respectively over the examination years 1992 to 1994, and the three-year average of the actual expenses in the budget years 1992 to 1994 served to record the third-party funding under (4). The aim of the selected periods and data volumes was to minimise the annual randomness in the differences between the universities. The redistribution that was sketched above can be described using the data compiled in Table 1. Column 1 lists the universities in North Rhine-Westphalia included in the redistribution of funds for teaching and research, and they are numbered consecutively in Column 2 with i, i = 12,,...,15. Columns 3 to 7 contain the shares aij of the universities i in the redistribution cri- teria j, j = 12,,...,5, in accordance with the information provided in (1) to (5) and the supplementary explanations (a) to (d). Col. 8 shows the sum of the weighted shares 5 S Pi =⋅∑ g jia j, i =1,...,15, j1= for each university, which, as an aggregated percentage rate, was relevant for the target I distribution of funds B (Col. 9), which the universities provided from the budgets Bi of the actual distribution (Col. 11 total, percentages in Col. 10). If the shares aij in accordance with (1) 4 to (5) or (a) to (d) are specified, the aggregated percentage rates then only depend on which weightings g j are assigned to the redistribution criteria j, j =1,...,5, on the basis of higher- education policies. This allocation was the result of a negotiation process (Fandel/Gal 2001) between the universities and the ministry: max z(g) = ()z11(g),...,z 5(g) ' with 5 ⎛⎞I zii(g) =⋅ ⎜⎟∑ a jg jB −Bi , i =1,...,15, ⎝⎠j1= 5 ⎧⎫5 g ∈=G ⎨⎬g ∈IR 0 ≤g jj≤1, j =1,...,5 , and ∑ g =1 , ⎩ j1= ⎭ which resulted after several iterations in the weighting vector g ==(g15,...,g ) (0,2;0,2;0,35;0,2;0,05), as shown in the heading of Table 1 above Cols. 3 to 7. However, a certain amount of leeway is removed from this negotiation process if the curricular standard values under (a) favour the scientific and technical subject groups in such a way in four criteria that this cannot be compensated through the weightings under (c) for calculating the shares of outside funding. The gains and losses in the redistribution for the universities (difference between Cols. 9 and 11) are shown in Col. 13 and their changes with regard to the actual distribution can be read off in Col. 12. Particular attention in respect of the subsequent comparison with the efficiency results of the Data Envelopment Analysis should be directed here to the gains made by the universities of Bielefeld and Wuppertal and to the losses suffered by those in Cologne and Münster. 5 Table 1: Initial data in 1996 for the redistribution in 1997 (Fandel/Gal 2001) Criteria j Target distribution Actual distribution Gain/loss Positions Stud. Grad. Outside Doct. Weights gj Sum of the 0,2 0,2 0,35 0,2 0,05 weighted No Unweighted shares aij shares DM mill. Ratio DM mill. in % of DM mill. University S SS I II I SI i ai1 ai2 ai3 ai4 ai5 Pi BPii=⋅B Pi BPii=⋅B Bi BBii− 123456 7 8 9 10 11 12 13 Aachen 1 13,46 10,30 15,33 15,40 20,34 14,21 21,12 13,76 20,44 3,31 0,68 Bielefeld 2 5,24 5,58 3,61 10,31 4,70 5,72 8,50 5,01 7,44 14,31 1,06 Bochum 3 10,66 8,74 8,84 11,17 10,95 9,76 14,49 10,20 15,16 -4,40 -0,67 Bonn 4 9,89 9,18 11,89 12,96 15,95 11,37 16,88 11,58 17,20 -1,84 -0,32 Dortmund 5 8,61 8,52 7,70 5,00 7,26 7,48 11,12 6,92 10,28 8,15 0,84 Düsseldorf 6 4,51 5,42 2,88 4,70 5,94 4,23 6,29 4,02 5,97 5,29 0,32 Cologne 7 8,17 11,98 10,61 8,71 10,81 10,03 14,89 10,65 15,82 -5,85 -0,93 Münster 8 9,29 10,86 12,26 9,15 10,47 10,67 15,86 11,60 17,23 -7,96 -1,37 DSH Köln 9 1,08 1,62 2,10 1,17 0,37 1,53 2,27 1,21 1,80 26,07 0,47 Duisburg 10 4,86 3,70 3,92 2,17 2,82 3,66 5,44 3,90 5,80 -6,28 -0,36 Essen 11 5,97 6,56 5,00 3,23 3,12 5,06 7,51 4,97 7,39 1,68 0,12 Paderborn 12 6,03 5,49 6,34 3,68 2,40 5,38 7,99 5,24 7,79 2,58 0,20 Siegen 13 4,60 4,00 3,72 4,04 2,02 3,93 5,84 4,07 6,04 -3,31 -0,20 Wuppertal 14 5,50 5,50 4,44 4,39 2,17 4,74 7,04 4,56 6,78 3,87 0,26 FU Hagen 15 2,13 2,56 1,36 3,92 0,66 2,23 3,31 2,31 3,43 -3,37 -0,12 Total 100,00 100,01 100,00 100,00 99,98 100,00 148,56 = B 99,99 148,58 = B / -0,01 II.
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