1. PERFORMANCE-BASED
FINANCING IN CHILE:
RELEVANT RESULTS
Ricardo Reich, Consultant
Division of Higher Education
Ministry of Education of Chile
Santiago, Chile, September 2015

2. 2
TERTIARY EDUCATION PRESENTATION
• 1.215.413 students in tertiary education
• 162 institutions
o 25 universities in CRUCH; 16 State y 9 private
o 35 private universities, since 1980
o 44 professional institutes (non-degree granting)
o 58 vocational centers (CFT)
• 1.168.607 undergraduate students, 46.806 graduates (4%)
o 58% universities
o 57% 1st year enrolment in vocational centers
• Public financing in TE: 1 % GDP (2013); 0.45% (2005)
• Student coverage in TE (18-24 years): 39% net; 66% of student enrolment
• Public financing in R&D: 0,4% GDP!!
• Tuition and fees (> US$ 3.800/year). National student-aid system:
scholarships and loans
• 1.215.413 students in tertiary education
• 162 institutions
o 25 universities in CRUCH; 16 State y 9 private
o 35 private universities, since 1980
o 44 professional institutes (non-degree granting)
o 58 vocational centers (CFT)
• 1.168.607 undergraduate students, 46.806 graduates (4%)
o 58% universities
o 57% 1st year enrolment in vocational centers
• Public financing in TE: 1 % GDP (2013); 0.45% (2005)
• Student coverage in TE (18-24 years): 39% net; 66% of student enrolment
• Public financing in R&D: 0,4% GDP!!
• Tuition and fees (> US$ 3.800/year). National student-aid system:
scholarships and loans
Source: SIES (Higher Education Information System, Ministry of Education), 2014

3. 3
FINANCING OF HIGHER EDUCATION AND
INSTRUMENTS

4. GASTO PUBLICO EN EDUCACION SUPERIOR COMO
PROPORCION DEL PIB
4
• El gasto en Educación Superior que realizará Chile en proporción al PIB el 2013 es
superior a la proporción del PIB que países como Estados Unidos, México y Portugal
destinaban a este ítem el 2009.
STATE EXPENDITURE IN HIGHER EDUCATION AS % OF GDP (2009)
2013

5. In the last decade, the State has more than doubled
its support to Tertiary Education, as % of GDP
Gobierno de Chile | Ministerio de Educación 5
0,45%
1,04%
2005 2013
HIGHER EDUCATION BUDGET. 2013
• Total Investment: 2,5% GDP. (1,6% is Average OECD)
• State Support: 1,04% (1,1% is Average OECD)

6. 6
HIGHER EDUCATION FINANCING
2013: MM$ 1.052.803

7. TE FINANCING IN CHILE
2000-2014
Research
Research
CONICYT
2000-2015
Supply-side:
Basal funding
to institutions
Demand-side:
Student Aid
(MORE
scholarships and
loans)
National Accreditation System, CNA
historical distribution
by law
no accountability
MECESUP
AIF
2000-2014
PAgreement Pilot
2007-2010
PA Scale-up
2012-2016
competitive
results-oriented
increased accountability
May change to partial
or total gratuity!

8. Basal byBasal by
LawLaw
Formula withFormula with
PerformancePerformance
AIF andAIF and
PerformancePerformance
AgreementsAgreements
1. Direct State Support 95%.1. Direct State Support 95%.
CRUCHCRUCH
3. Indirect State Support. CRUCH3. Indirect State Support. CRUCH
4. Special Support U. de Chile4. Special Support U. de Chile
1. Direct State Support 95%.1. Direct State Support 95%.
CRUCHCRUCH
3. Indirect State Support. CRUCH3. Indirect State Support. CRUCH
4. Special Support U. de Chile4. Special Support U. de Chile
1. Direct State Support 5%.1. Direct State Support 5%.
CRUCHCRUCH
2. Academic Remedials. Q1&Q22. Academic Remedials. Q1&Q2
3. Strengthening CRUCH. Q1&Q23. Strengthening CRUCH. Q1&Q2
4. Basal Funding. CRUCH4. Basal Funding. CRUCH
1. Direct State Support 5%.1. Direct State Support 5%.
CRUCHCRUCH
2. Academic Remedials. Q1&Q22. Academic Remedials. Q1&Q2
3. Strengthening CRUCH. Q1&Q23. Strengthening CRUCH. Q1&Q2
4. Basal Funding. CRUCH4. Basal Funding. CRUCH
1. PA Humanities&Social Sciences1. PA Humanities&Social Sciences
2. PA New Teacher Training2. PA New Teacher Training
3. PA Undergraduate Curricula3. PA Undergraduate Curricula
4. PA Internationalisation of Ph.D.4. PA Internationalisation of Ph.D.
5. PA Vocational Education5. PA Vocational Education
6. PA Regional Institutions6. PA Regional Institutions
7. PA Innovation (from R&D)7. PA Innovation (from R&D)
8. Small Projects AIF28. Small Projects AIF2
1. PA Humanities&Social Sciences1. PA Humanities&Social Sciences
2. PA New Teacher Training2. PA New Teacher Training
3. PA Undergraduate Curricula3. PA Undergraduate Curricula
4. PA Internationalisation of Ph.D.4. PA Internationalisation of Ph.D.
5. PA Vocational Education5. PA Vocational Education
6. PA Regional Institutions6. PA Regional Institutions
7. PA Innovation (from R&D)7. PA Innovation (from R&D)
8. Small Projects AIF28. Small Projects AIF2
MANAGEMENT
BY RESULTS

9. 9
FINANCING OF HIGHER EDUCATION

10. TRANSFORMATION OF
FINANCING MECHANISMS IN CHILE
PBA
AIF2

11. 11
PROGRAM MECESUP
ACADEMIC INNOVATION FUND
PERFORMANCE AGREEMENTS

12. supportive
regulatory
framework
autonomy
academic freedom
leadership team
strategic vision
culture of excellence
public budget resources
endowment revenues
tuition fees
research grants
donations
students
teaching staff
researchers
graduates research
output
technology
transfer&
innovation
WCU
FAVORABLE
GOVERNANCE
ABUNDANT
RESOURCES
CONCENTRATION
OF TALENT
Source: Salmi 2009
Note WCU= Word-class University
International
Quality
MECESUP
PROGRAM
2000-2016
INTERNATIONALIZATION

13. 13
THE MECESUP PROGRAM
1999-2016
• Phase I. Recovery of academic infrastructure and
capacity building
• Competitive Fund (CF). 1999-2004
• Phase II. Academic innovation and results
• Academic Innovation Fund (AIF). 2006-2010
• Performance Agreement (PA) Pilot. 2007-2010
• Performance Agreements in the Humanities, Social
Sciences and Arts. 2010-2016
• Phase III. Institutional change management
• Performance Agreement Scale-Up. 2012-2016
• Upgraded AIF2. 2012-2016
PilotPilot

14. 1999 – 2000 – 2001 – 2002 – 2003 – 2004 – 2005 – 2006 – 2007 – 2008 – 2009 – 2010 – 2011 – 2012
Phase I. MECESUP 1
(Loan 4404 – CH)
Phase I. MECESUP 1
(Loan 4404 – CH)
Phase II. MECESUP 2
(Loan 7317 – CH)
Phase II. MECESUP 2
(Loan 7317 – CH)
Academic
Innovation
Fund
(AIF)
Competitive
Fund
Performance
Agreement Pilot
Performance
Agreement Pilot
Performance
Agreements in Arts,
Humanities and Social
Sciences
Performance
Agreements in Arts,
Humanities and Social
Sciences
Academic
Innovation
and Results
MECESUP1&2 PROGRAMS
Academic Infrastructure and
Capacity Building

15. Competitive Academic Innovation Fund
1999-2008 Competitions
PROPOSAL ALLOCATION
• 9 calls. US$ 450 millions
• 1821 proposals presented
• 33 universities. 28 CFT & 2 IP
• 769 proyects allocated; approval rate,
42%:
• 439 undergraduate, 57%
• 181 graduate, Ph.Ds, 23%
• 104 technitians, 14%
• 45 management, 6%
• Average project size: US$ 590,000
• Implementation: 1-3 years
15

16. 16
ADJUDICACIONES DEL FIAC
DISTRIBUCION GEOGRAFICA
30<=MECE<39
30<=MECE<39
30<=MECE<39
AIF 1999-2008
70% of projects allocated
in regions, outside the capital

17. MECESUP AIF SUSTAINED $ ALLOCATIONS
GRANT CALLS 1999-2008
17
PBA pilot
2007-2010
US$ 20 million, 3 years
AIF2 &
PA scale-up
2012-2016
to US$, multiply x2/1,000,000

18. 18
PRESIDENT
Academic VP Research&PG Finances Outreach
to Society
International
Relations
Teaching-
Learning Units
Institutional
Research Units
Staff Development
Information&Kowledge
Remedial Programs
Curricula Innovation
Tecnology Integration
Infrastructure Improvement
Student Mobility
ECTS-Chile
Valorization of
Research
Results Unit
Strategic Planning
Educational Model Towards InnovationDevelopment Plan
Support to Local
Ph.D. Programs
Scholarships
Instrumentation
International-
ization
Outreach
M&E Actions&Results
Support Governance,
Planning and
Decission Making
Performance Indicator
Management and
Benchmarking
Quality-Teaching Efficiency-Mobility-Employability
Quality.Act20
Equityin
AccesstoQuality
Sustainability. 1999-Today
AIF

19. 19
THE CHILEAN PH.D. PROGRAMS
AN OUTSTANTING OUTCOME

20. 20
2000 2010 2013
N° Programs 62 195 233
Full-time faculty 7.400 11.005 14.880
Full-time faculty
with a Ph.D.
2.200 4.040 5.609
Student enrolment 1.053 4.055 4.653
Student graduation 157 433 602
Graduation/million
inhabitants
10 25.5 34
AVAILABLE TALENTS
IN CHILEAN PH.D. PROGRAMS
3.409
155%
3.409
155%

21. 21
THE CHILEAN PH.D. PROGRAMS
RESEARCH OUTPUT

22. 22
THE CHILEAN PH.D. PROGRAMS
OUTPUT IN TOP10% OF USA

23. 23
THE CHILEAN PH.D. PROGRAMS
RESEARCH CITATION IMPACT

24. 24
THE CHILEAN PH.D. PROGRAMS
INTERNATIONAL COLLABORATION

25. 25
RESEARCH AND DOCTORAL STUDIES AT
UNIVERSIDAD DE LA FRONTERA
AN OUTSTANTING OUTCOME

26. 26
RESEARCH OUTCOME OF
UNIVERSIDAD DE LA FRONTERA

27. 27
PH.Ds IN NATURAL AND MOLECULAR BIO-
SCIENCES
QUALITY OF OUTPUT

28. 28
PH.Ds IN NATURAL AND MOLECULAR BIO-
SCIENCES
QUALITY OF OUTPUT

29. 29
Phase III
2008-2016
Performance agreement scale-up
Academic Innovation Fund upgrade (AIF2)

30. New Teacher Training
Undergraduate Curricula Reform
Internationalization of PhD´s
Support to Vocational Training
Support to Regional HE
Innovation in Higher Education
New Teacher Training
Undergraduate Curricula Reform
Internationalization of PhD´s
Support to Vocational Training
Support to Regional HE
Innovation in Higher Education
2012 – 2013 – 2014 – 2015 – 2016
Performance Agreement
Scale-up
2012-2016
Performance Agreement
Scale-up
2012-2016
MECESUP 3
(Loan 8126-CL)
Management
by Results
AIF2
Small Projects
(upgraded)
AIF2
Small Projects
(upgraded)

31. AIF and PERFORMANCE AGREEMENTS
Competition, Pre-Selection and Negotiation
31

32. EXPECTED RESULTS OF NEGOTIATION

33. 33
EXPECTED OUTSTANDING OUTCOMES
BASE VALUES AND TARGETS
(EXAMPLES)
• Professors with PhD and researchers: head count & % full time
• First year student retention
• Low income student retention and graduation
• Undergraduate graduation and time-to-graduation
• Enrollment and graduation of Chilean and foreign students in
PhD programs
• Student and professor proficiency in English
• Teaching and research publications & citations
• Valorization of academic results for innovation;
Ministerio de Educación - DIVESUP

34. 34
IMPLEMENTATION STRATEGIES
RELEVANT RESULTS

35. 35
COMPETITIVE FUNDING
IMPLEMENTATION STRATEGY
• Generate equal opportunities in access to funding
• Introduce strategic planning and management by results
• Induce changes with (competitive) incentives:
• World Bank Loans 4404-CH, 7317-CH, and 8126-CL combined with
• Incremental state budget
• Trust institutions, their capabilities, ideas, strategies
• Assure transparency and generate credibility
• Act pro-actively and facilitate change
• Invite institutional shared funding for greater impact
• Increase M&E requirements towards useful results, outcomes
and accountability
• Implement changes gradually! Pilot and replicate!

36. 36
AIF
ACADEMIC OUTCOME SUMMARY
• Mecesup’S AIF has been a succesfull instrument and
implementation story
• It has been very useful and flexible for many types of institutional
quality improvement changes that can be generated by academia
bottom-up
• Not so useful for the solution of complex or strategical institutional
problems that require top- bottom design, determined decission
making, successful negotiation with funding agency and
academia, and good and effective leadership
• MECESUP was implemented step—by-step, starting with pilots
and then scaled-up
• Main agency efforts were placed on student learning and
institutional project facilitation

37. 37
AIF
MANAGEMENT INTERVENTION SUMMARY
• Incremental financing
• Competitive and performance-based funding
• As eligibility requirements:
• Quality assurance: accreditation
• Institutional strategic planning
• Educational model definition
• Management by results
• M&E based on project progress and relevant performance
indicators
• Teaching-Learning Units
• Institutional Research Offices

38. Division of Higher Education
Contact:
Dr. Ricardo Reich
Teatinos 20, Piso 2
Santiago, Chile
Phone: 56-2-22406-6815
E-mail: ricardo.reich@mineduc.cl