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- Shortage of teachers and administrative personnel of required qualification;

- Discrepancy between current mechanisms of public management and the task of creating favourable conditions for the development of educational system.

In order to increase efficient use of budgetary funds in conditions of shortage of budgetary financing of higher education at the beginning of 2000 a concept of transition to normative per capita financing of higher education in the form of government personal education loan (GPEL) was adopted. This concept envisaged that the budgetary financing should follow university entrant, i.e. the volume of university funding should depend on the choice of consumer, which should stimulate the quality of educational service delivery. Implementation of GPEL was linked with USE experiment for school leavers. Value of state personal education loans given to school leavers for covering their higher educa tion depended on obtained USE results.

However, they did not succeed to implement the concept in original type. During 20022003 experiment on GPEL implementation the fol lowing amendments were introduced in the concept, which reduced its efficiency:

- It was envisaged originally that proper institutions of higher educa tion set the tuition and in case GPEL value did not cover it, students pay additionally for their higher education (to a greater or lesser ex tent depending on GPEL category). However, institutions of higher education were forced to accept no less than half of the student en rolment only at the expense of GPEL without additional payment by the student. In that case students who study on paid basis party pay for the education of the students who study at the expense of budgetary funds. At the same time, this situation creates incentives for institutions of higher education to accept really well prepared university entrants who want to study at the expense of budgetary funds because enrolment of university entrants with low knowledge will negatively influence their financial situation.

- It was envisaged originally that state personal education loans were distributed by categories not regardless of the number of points gathered by a school leaver but depending on determined in ad vance percentage ratio of different categories of GPEL. For exam ple, GPEL of highest category were to be given to 5 per cent of the best school leavers who passed USE, second category to follow ing 15 per cent, third 35 per cent, fourth 20 per cent, fifth per cent. However, in practice GPEL categories were tied to the number of points gathered by each school leaver, which resulted in overestimation of USE marks and corruption.

- It was envisaged originally that major part of higher education budget would be distributed by GPEL system. However, in the end it was decided to distribute only 60 per cent of higher education budget (payroll salary and other current expenses) by GPEL sys tem. Meanwhile, the higher the share of higher education budget distributed by GPEL system the higher, other things equal, will be the value of each GPEL category. For example, in case 70 per cent of higher education budget is distributed by GPEL system value of GPEL categories would vary between 21.9 and 3.1 thousand rub bles. In reality, in the course of 2002 experiment value of GPEL categories varied between 14.5 and 1.2 thousand rubbles. Given average tuition in provincial institutions of higher education in the amount of 1819 thousand rubbles annually value of third GPEL category constitutes only 21.7 per cent of tuition. It is clear that in this case consumers s influence on institutions of higher education will be small, on the one hand, and, on the other hand, consumer from low income family has fewer chances for choosing institution of higher education and specialty.

- Target enrollment does not solve the issue of training personnel in non prestigious specialties in budgetary sector because the duty of graduates who were accepted in the framework of target enrolment to work off the money invested in their education is not defined in the law. However, even is such duty existed the practice of target enrolment would have produced negative selection. As a result the village school can get a teacher who is incapable to teach children.

It is evident that low salaries and low conditions of life in villages, which do not correspond in the majority of cases to the require ments of contemporary young men, cause the shortage of person nel in the budgetary sector. It is impossible to solve this issue by way of an artificial enrolment into institutions of higher education of this category of students. GPEL experiment manifested it evidently.

Thereby, the early results of the experiment demonstrate that un derdeveloped procedure of USE leads to a situation where regions and institutions of higher education interested in receiving from the state higher categories of GPEL have possibilities to influence USE results (including through corruption). This leads to an unplanned increase in budgetary expenditures. For example, according to preliminary calcula tions not more then 9 per cent of persons who passed unified state ex amination were to receive 2nd category of GPEL. In practice this GPEL category received 46 per cent of students enrolled to the first year.

1.3. Science 1.3.1. Scientific institutions network Organizational structure of Russian science is characterized by traditional division into sectors (public, including organizations of public academies, entrepreneurial and sector of higher education).

About forty per cent of the organizations are public institutions and are financed by cost estimation. Besides, seventy per cent of scientific and technical organizations still belong to the public sector at present.

Federal budget appropriations constitute nearly 58 per cent of the overall spending on research and development. Issue of efficient con sumption of public funds in the sphere of science applies not only to budgetary institutions but to institutions of other organizational and le gal forms.

In public scientific organizations sector central place is taken by academic scientific organizations, which are in jurisdiction of six state academies, the largest of which is the Russian Academy of Sciences (RAS). They constitute the basis of the current network and are mainly budgetary institutions. Higher education establishments are also mainly in government ownership because nonpublic institutions of higher edu cation practically lack scientific basis. Industrial (entrepreneurial) sec tor is represented by mainly public unitary enterprises. In addition, the state retained control over two thirds of privatized scientific organiza tions. All three sectors of science do not interact but confront each other in the fight for public funds. This results in the situation when sci entific research if separated from educational process and prediscov ery and applied research have low commercial potential.

The Federal law On Science and State Scientific and Technological Policy of 23 August 1996 No.127 FZ defines the notion of a scientific organization as the main one. However, it does not provide well defined definition of organizational and legal forms for these institutions and does not offer limits for choosing organizational and legal forms.

However, current system of statistical record of scientific activity uses terms and notions, which differ from those used in the Federal law on Science and State Scientific and Technological Policy. Statistical observations, which can provide an idea about the structure of scientific institutions network, deal not with scientific institutions as a whole but with those that carry out research and development (RD). Thereby, the scope of government statistics of science is narrower than the borders of science set by the federal law.

Research and development institutes, which grew in numbers after the dissolution of the USSR mainly by way of elevating the status of al ready existing structural subdivisions of, as a rule, budgetary research and development institutions take main place in the structure of scien tific organizations.

Table Number and composition of organizations, which carry out research and development (by year end) 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Scientific organiza4,555 4,269 3,968 4,059 4,122 4,137 4,019 4,089 4,099 4,073 3,tions, of which:

Research and devel- 2,077 2,150 2,166 2,284 2,360 2,528 2,549 2,603 2,686 2,676 2,opment Of which academic organizations (RAS, 729 746 764 787 800 804 775 782 807 819 RAMS, RAAC) Institutions of higher 446 456 400 395 405 405 393 387 390 388 education Source: Science in Russia. Statistical compendium. Moscow, RF Goskomstat, 2001.

Russian Science in Numbers 2003. Statistical compendium. Moscow, TSISC, 2003.

The highest growth rates in the number of scientific organization were characteristic of Russian Academy of Sciences and other state academies. This situation was stipulated, first of all, by breaking up of existing institutions as well as by creating institutional entities in accor dance with new directions of science development (for example, eco nomic, socio political centers aimed at examining market processes, etc.) The system of state academies saw creation of commercial or ganizations aimed at developing new technologies and using findings of fundamental and applied research carried out by academic institu tions27.

Part of organizations enumerated above have organizational and le gal form of a budgetary institution. However, in practice of statistical records of the sphere of science division of organizations is carried out not by organizational and legal forms, as was mentioned above, but by sectors of science, in particular, in current RF Goskomstat28 classifica tion there are the following sectors of science:

- Public sector. Its performance is directed at supporting state ad ministration and serving the need of the society as a whole;

- Entrepreneurial sector. It comprises organizations and enterprises whose main activity consists in producing goods and services for sale (including those in public ownership);

- Higher education sector. It is connected with professional training of qualified specialists by institutions of higher education;

- Private not for profit sector. It comprises non profit private organi zations.

This division is not always a systemic one (for example, many organi zations, which are traditionally considered in Russia as public ones, mainly carry out commercial orders.) As regards growth of number of organizations in each of above men tioned sectors only in private non profit sector significant changes took place: the number of organizations in this sector increased from 5 in 1992 up to 47 in 200229.

Major part of budgetary scientific institutions is concentrated in the public sector and in higher education sector.

Public sector comprises organizations of federal ministries and agencies, bodies of administration of republics, krai, regions, and local administrations as well as organizations of RAS and academies of sci ence with public status. The majority of academic organizations are budgetary institutions.

Mindeli L., Gudkova. Structure of scientific organizations network: venues of transfor mation. Moscow. TSISC, 2004, p. 15.

Methodological recommendations to the form of state statistical reports (form 2 science).

Centre for research and statistics of science, 2004.

Table Research and development organization by sector of activity Public Entrepreneu- Higher education Private nonTotal sector rial sector sector profit sector 1992 4,555 1,266 2,767 517 1993 4,269 1,161 2,588 513 1994 3,968 1,150 2,300 511 1995 4,059 1,193 2,345 511 1996 4,122 1,202 2,351 548 1997 4,137 1,223 2,336 543 1998 4,019 1,212 2,238 531 1999 4,089 1,221 2,305 529 2000 4,099 1,247 2,278 526 2001 4,037 1,248 2,213 529 2002 3,906 1,218 2,110 531 Source: Centre for research and statistics of science, 2004.

As was noted above, academic science organizations grew at suffi ciently high rates in 1990 the number of scientific organizations grew at six per cent per annum, in 2002 the number of scientific organiza tions grew by 21.4 per cent annually. Out of the overall number of aca demic organizations 54.7 per cent belong to RAS (from 1990 the num ber of scientific organizations increased by 52.9 per cent.) Higher education sector comprises universities and other higher education establishments regardless of sources of funding and organ izational and legal status, research and development institutions, ex perimental stations, and clinics in direct jurisdiction and management of higher education establishments or associated with them as well as or ganizations directly delivering services for higher education system. In this sector of science a number of research and development institutes under higher education establishments but financially independent from them and also proper universities and higher education establish ments that carry out scientific activity carry the form of budgetary insti tution.

In higher education sector in the period 19951996 the number of research and development institutes under higher education estab lishments sharply increased, which was due to reduced departmental requirements needed for their creation. Lately, the number of research and development institutes practically does not grow. At the same time, there is a reduction in the number of higher education establishments that are engaged in research and development.

The process of integration of research and development institutes into higher education establishment started in 2004. This process is suspended due to the onset of administrative reform.

All this information does not provide grounds for judging about the development of scientific network represented by proper public institu tions. Although the majority of organizations in RAS system and ap plied research academies are budgetary institutions, it is not feasible to determine their exact number. The same refers to research and devel opment institutes under higher education establishments.

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