For example, a large part of the educational deficit results from drop-outs rather than failure to enrol. Likewise, substantial gaps in attainment between students from richer
and poorer households occur in all countries.
Most importantly – and disappointingly – levels of learn-
ing achievement in nearly all developing countries are
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How to Spend $50 Billion to Make the World a Better Place abysmally low. Only former Soviet bloc countries and the
Southeast Asian tiger economies achieve results compara-
ble to those of OECD members. In recent tests, virtually
all developing countries perform far worse than Greece
(the poorest performing major OECD country). Only 3.1%
of Indonesian students scored higher in reading compe-
tency than the average French student, and the average Brazilian maths student achieves the same as the bottom
2% of Danes.
Poor performance is caused, at least in part, by systems
that are geared to measure inputs (money spent, schools
constructed, etc.) instead of students’ performance. Also, in many countries, the entire system is seriously deficient, with school infrastructure being inadequate, the most basic teaching materials (pencils, paper, chalk, textbooks) in short supply, and teachers poorly trained, supervised, and monitored. In lower- and middle-income countries, there is a
severe lack of educational achievement, but it is not due to children not enrolling in school.
In summary, this challenge requires several factors to
be addressed so that mastery of basic competencies can be
achieved:
r Increasing the competence of children entering school.
r Increasing learning achievement at school by –
r Reducing the number of children who never enrol
r Reducing late enrolment
r Increasing the number of years schooling completed
by each student.
r Increasing the competence gain per year of schooling.
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F
Improve
'quality'
School II
(School I to
D
School II)
E
C
Threshold
Extend enrolment
(Never enrolment (A),
B
drop-out (B), extend
Raise competency at
A
low learning (C))
initial school age
'Basic'
Age
schooling
Figure 4.1. How to raise the levels of competence through schooling: the proximate determinants of learning achievement
Analytical framework for evaluating opportunities
None of these proximate factors is directly under the direct control of national or regional policy makers: outcomes
are determined by individual decisions of children, par-
ents, and teachers. Many opportunities can be proposed,
but to be credible there must be a coherent causal chain
from proposed action to desired output; it is not good
enough to state that simply building more schools will mean higher enrolment.
Demand
Parents and children make decisions about schooling by
balancing expected benefits (for instance, increased income or better health) against costs (for instance, books, uniform, and travel, plus the opportunity cost of the child doing
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How to Spend $50 Billion to Make the World a Better Place something else). Even if the benefits exceed the costs,
demand may be constrained by lack of current income.
Supply
Formal schooling can in principle be supplied by either
the public or private sectors (including commercial com-
panies, religious organizations, and NGOs). Supply is virtually unconstrained in the longer term, although schooling
provided at below market cost clearly is limited.
What opportunities exist and how can they
be assessed?
Improvements to educational achievement may arise either
through policy action or systemic reform. Below, four policy options are considered:
r Expanding provision by building or expanding schools
(supply-side).
r Improving quality with targeted increases in expendi-
tures (supply-side).
r Direct support to households to reduce the real costs of schooling (demand-side).
r Raising the benefits of schooling (demand-side).
But policy changes may not be enough: The present pub-
lic sector framework may provide the wrong incentives to
improve overall standards of basic education. This does
not mean that governments cannot provide good quality
education – they do indeed provide it in high-performing
countries such as Korea or Hungary. This chapter considers
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systemic reform of the role of government in setting policy, focusing on outcomes, incentives, and responsibilities.
Evaluating the four opportunities for policy action
In this section, the various policy options are assessed for their potential to produce high returns in tackling the challenge of poor educational achievement.
Opportunity 1: Supply side; expanding the quantity
of schools
A commitment to universal primary education has been
a high priority in development programs for many years.
However, it is generally assumed that providing more
money for governments to build schools will effectively
increase take-up of education. The cost of educating the
100–120 million children who have not yet received primary education has been estimated as between $9.1 billion and
$27.6 billion, depending on the assumptions used.
However, these figures might better be interpreted as the
cost of providing educational facilities if all these children decided to attend. Empirical evidence strongly suggests that provision of spaces is not in itself the answer. Research
in small communities in 21 different developing countries
showed that, although school construction positively affects enrolment, the impact is very small. For the communities surveyed, enrolment of 6–14 year olds averaged 53.2%.
Building a primary school in every community would only
marginally increase this, to 55.4%.
Similarly, analysis of the District Primary Education
Project (DPEP) in India shows that the $1.62 billion spent
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How to Spend $50 Billion to M
ake the World a Better Place since 1994 to expand and improve the quality of schooling
has increased enrolment by only 1–2% compared with areas
not in the program.
While in some remote areas supply is a key constraint,
simply expanding the school system is not the general
answer.
Opportunity 2: Improving quality; supply side
policy actions
Raising the quality of education would have multiple posi-
tive impacts, including reducing the drop-out rate, increasing overall enrolment, and raising the level of achieve-
ment of those already enrolled. The question that looms is whether increased spending per pupil is sufficient, or serious systemic reform is necessary to realize the benefits of additional expenditure.
In simple terms, certain combinations of teaching ser-
vices and instructional materials lead to particular learning achievements. Assuming that the balance between teaching and materials is not optimized, a given expenditure will have much better results if it is spent on the input that is furthest from optimum. For example, there would be little
point in employing more teachers if learning was constra-
ined by a severe shortage of textbooks or writing materials.
This framework can be used, for example, to analyze the
evidence on class size, which illustrates four fundamental points:
1. Smaller class size is only good for education in some
cases. If learning is already effective, a smaller class will
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yes
Are schools currently
Opportunity 2A:
efficient?
Expand expenditures
per pupil
no
Are these interventions
yes
yes
Are there known
implementable in the
Opportunity 2B:
interventions that are
current institutional
Expand expenditures
cost-effective?
setting?
on cost-effective
interventions
no
Opportunity 5:
Systemic
reform
no
Are interventions
Are there promising
yes
to be evaluated
yes
Opportunity 2C:
interventions
implementable in
Experimentation
to be evaluated?
current institutional
with rigorous
setting?
evaluation
Figure 4.2. Decision tree for evaluating supply-side policy actions for improving education
have no effect, but reducing the size of a very large class may be a significant positive factor.
2. There seems to be a small (less than 3%) increase in
student scores in some subjects when class sizes are
reduced by five from a typical level of 25 students. For
poorer countries, where class sizes may be much larger,
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How to Spend $50 Billion to Make the World a Better Place there can be real and significant effects (supported by
evidence from apartheid-era South Africa and Bolivia).
3. Only a fraction of the variation in learning achievement can be attributed to differences between schools. Much
of the difference in achievement occurs within schools,
and a large part of the remainder is due to differences
in student background. Typically, a maximum of about
20% of student performance can be attributed to school
performance.
4. Class sizes as determined by public policy do not necessarily represent the optimum use of resources. Although
smaller class sizes in some circumstances may be very
beneficial, in other cases there may be no positive effect (for instance, if poorly trained teachers are unable to
apply appropriate teaching methods).
2A: Overall budget expansion Increased funding of education alone rarely achieves increased quality, and crude
proxies such as class size or share of GDP say nothing
about achievement. Indeed, during 1970–1994, OECD coun-
tries significantly increased real expenditures per pupil, but estimated learning achievement in maths and science at
best made very modest gains – and in most cases actually
decreased.
The current consensus amongst education specialists is
that extra spending on education in developing countries is necessary, but will only increase quality if
a) The extra budget is targeted at highly productive activities (Opportunity 2B).
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b) It is devoted to, or combined with, new educational techniques (Opportunity 2C).
c) It is accompanied by systemic reform.
2B: Targeted expansion of particular elements of the education system. Improved attainment levels could be aided by interventions in three categories: instructional materials, key infrastructure, and teacher training. Such interventions would almost certainly have substantial, cost-effective impacts on learning achievement. The particular interventions will depend on the individual circumstances of the
countries, regions, and schools.
However, cause and effect are difficult to determine,
given the large influence of parental choice and the fact
that additional educational inputs may be ineffective if the school itself is dysfunctional.
Effective changes are not easy to implement. There are
many examples of teacher training initiatives that have had no positive impact on educational achievement. Moreover,
if a particular change would dramatically improve attain-
ment levels, why has it not already occurred? The conclu-
sion is that the present policy system does not offer appropriate incentives to improve efficiency.
2C: Experimentation with rigorous evaluation. Rigorous evaluations of the impact of interventions are carried out
infrequently. They often produce surprising results that
challenge the conventional wisdom about the effectiveness
of particular actions.
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How to Spend $50 Billion to Make the World a Better Place Impact evaluations of interventions should be carried
out more readily: not just “before and after” studies, but also
“with and without” as a better measure of the true effect.
However, the results must also be used as a basis for future improvements: If they are ignored, they have zero value.
To summarize, supply-side improvements to quality are
clearly possible in a variety of circumstances. However, the present author believes that nearly all developing countries will meet the educational challenge far more effectively via a process of systemic reform.
>
Opportunity 3: Demand side; raising the benefits
of schooling
There are two demand-side opportunities that are indirect, but may be strongly correlated with educational achievement. Moreover, these are not education specific: Their general positive impact will probably make them cost-effective even without considering effects on education.
3A: The effect of income on education. Household factors –
income and parental education – are strongly correlated
with educational outcome. International comparisons sug-
gest that a child from a rich household where both parents have had five years schooling would be 28% more likely to
be enrolled at school than a poor child with uneducated parents. Over time, such factors can have large social effects, such as in Vietnam, where significant reductions in child
labor (with presumably large increases in school enrolment) occurred as households emerged from poverty. Because
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such demand-side changes occur relatively slowly, so does
the transition from moderate to near universal uptake of
basic education.
3B: The effect of raising returns to education. In situations where the apparent benefits are low (i.e., stagnant economic and technological conditions), parents may decide
not to send their children to school, or may discourage their children from staying in school. However, evidence suggests that parents respond positively to perceived increased returns, and the catalyst is often technological change.
For instance, the “green revolution” of the 1970s intro-
duced high-yielding, dwarf varieties of rice and wheat, and increased farm profits significantly. Regions of India that adopted the new technology experienced a large increases
in the return on education and these resulted in significant expansions of education.
Opportunity 4: Demand side; direct support that
lowers the cost of schooling
Various initiatives can reduce the household cost of education. On an economic basis, these should clearly increase
the demand for schooling.
Blanket fee reductions can increase school enrolment.
Experience in Africa with fee elimination shows that initial enrolment increases dramatically, but it does not necessarily translate to higher attainment at secondary school level.
Reductions in school budgets because of lost income may
indeed reduce overall quality.
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