Efficiency in Indonesian Higher Education: Different Governance Leads to Different Performance

Abstract

This study aims to analyze cost efficiency’s performance when producing university outputs from 45 public universities in Indonesia. A stochastic cost frontier multiproduct with six key performance indicators and annual public spending was used as the output and input for the analysis. This study finds that cost efficiency’s score is high, compared to one in a previous study. Higher education using the Public Service Agency management pattern has the highest efficiency score compared to establishments with Work Unit and Legal Entity management patterns. This study has several implications; first, the need for effective management patterns; second, the re-evaluation of the privatization policy; and third, improvement in education’s output or input.