Policy implications of the scale economies of the Universitas Terbuka (The Indonesian Open University) courses and programs

The introduction of Universitas Terbuka (the Indonesian Open University) into the Indonesian higher education system by the government of the Republic of Indonesia was designed to achieve three major objectives: (1) to increase aggregate access to higher education; (2) to promote increased equity in educational opportunities by providing those not eligible for other institutions a second chance to obtain higher education; and (3) to improve the efficiency of the up-grading programs for the Junior and Senior High School teachers.;The unit costs of the courses and programs offered by the School of Mathematics and Physics are relatively high compared with the courses and programs offered by the other schools. The least expensive courses and programs are those offered by the School of Social and Political Sciences. In terms of the overall operational costs, however, the cost per student at the UT system is lower than the unit cost at the campus university systems. The comparative unit cost analysis, based on various enrollment levels, shows positive scale economies in the UT courses. Present enrollment levels for the courses supporting the programs offered by the School of Mathematics and Physics and School of Education are not yet sufficient to capture the potential scale economies in the UT system. The recent pattern of changes in expenditures and enrollments suggests that enrollment levels are not the determinant factor for the UT cost structure.;Four alternative changes in the operational policies for exploiting the potential scale economies in the UT operational systems were proposed to the UT administrators. This study shows that the administrators are confident that UT has the opportunity to provide intensive student support programs from manpower, finance, law and regulation, and technology and skills. The main constraint, however, could be the recurrent costs for tutors and program administrators. UT could gain strong support from the unaccredited private universities to implement the program transfer policy; this policy could improve the quality of these institution's instructional programs. To merge the small courses and reduce the course offerings would face resistance from the school's deans. They may perceive that implementation of these policies could reduce the school's autonomy. On the other hand, the UPBJJ administrators support these policies. Their favorable responses to these changes may reflect their expectation for greater future role in the UT system.;While initially successful at achieving these objectives, the decline in enrollment between 1986-1988 has raised the question of the scale economies of the Universitas Terbuka (UT) courses and programs. Cost analysis and policy analysis have been made for the related data in order to identify the policy implications of the scale economies of the existing UT courses and programs.