Resource Dependence Analysis of Public Higher Education Institutions in Uzbekistan

Since the early years of independence in 1991, a central topic of higher education in Uzbekistan has been how to fill the gap left by the reduced government funding at public higher education institutions (HEIs). The majority of the Uzbek universities, as in many other countries, have responded to the decline in public allocations through charging significantly increased tuition fees. Therefore, the revenue structure of public HEIs has changed from full government funding to mostly tuition funding over the last decade. Utilising resource dependence theory (RDT), this study empirically investigates whether or not increased institutional reliance on tuition fees as a main source of revenue has augmented the share of institutional expenditures dedicated to educational activities at public HEIs in Uzbekistan over the period 2000-2013. Drawing on a 14- year panel of university-level data and employing an instrumental variable approach that acknowledges the potential endogeneity of institutional tuition revenue, the analysis suggests that institutional expenditures for educational expenses are considerably increased as institutions became more dependent on tuition revenue for their financially sustainable operation. This finding is consistent with the predictions of RDT. Robustness of the empirical findings is also checked utilising several diagnostic models, and the results revealed that the IVs applied during the TSLS estimations are valid and they simultaneously uncorrelated with the error term.