Determinants of Technical Efficiency of Public Universities in South Africa

Using a second-stage Data Envelope Analysis (DEA) model, this paper seeks to determine the drivers of efficiency for 23 public universities in South Africa for the period 2009-2016 with special attention given to the funding–efficiency nexus. Our Tobit results indicate that quality of staff, government funding, student fees, private income, and Gross Domestic Product (GDP) per capita are positive factors of efficiency, while the proportion of non-white to white staff was found as the determinant of inefficiency. It was concluded that adequate funding and proper management of income by the universities, economic growth and employment of high educated academic staff can increase efficiency levels of the public universities in South Africa. On the other hand, an increase of non-white to white staff in the South African public universities is a threat to the universities’ efficiency. It is, therefore, vital to allocate adequate funding for universities to improve their efficiency.