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ED/EFA/MRT/2015/PI/11

Background paper prepared for the
Education for All Global Monitoring Report 2015

Education for All 2000-2015: achievements and
challenges

Decentralization and the Quality of Education
Anila Channa

2015

This paper was commissioned by the Education for All Global Monitoring Report as background
information to assist in drafting the 2015 report. It has not been edited by the team. The views
and opinions expressed in this paper are those of the author(s) and should not be attributed to
the EFA Global Monitoring Report or to UNESCO. The papers can be cited with the following
reference: “Paper commissioned for the EFA Global Monitoring Report 2015, Education for All
2000-2015: achievements and challenges” For further information, please contact
efareport@unesco.org

Background paper prepared for
Education for All Global Monitoring Report 2015

Decentralization and the Quality of Education
Anila Channa
April 2014
Abstract
Although decentralization has increasingly been advocated as a way of enhancing educational
quality, its potential in this area is still subject to some debate. This paper traces the popularity of
education decentralization over the past few decades to highlight that the post 2000 era has been
characterized by a deepening of reforms implemented earlier, an enhanced focus on school
decentralization interventions, and a notable increase in schemes in Africa. The article then
examines the empirical evidence on the relationship between decentralization and educational
quality to show that although the scholarship is limited in size and quality, a handful of rigorous
studies suggest that decentralization has the potential to enhance quality. Detailed case studies on
Mexico, Indonesia and Kenya supplement these two sets of analyses to not only showcase how
decentralization policies have evolved over time in these countries, but to also illustrate why
different decentralization approaches can result in dramatically different quality outcomes.
Table of Contents
1. Introduction ........................................................................................................................................................ 2
2. Decentralization and quality of education ......................................................................................................... 3
3. Evolution in education decentralization policies: impetus and popularity ........................................................ 4
3.1. Efforts in the 1980s and 1990s .................................................................................................................... 4
3.2. Education decentralization in the 2000s ..................................................................................................... 5
4. Evidence on decentralization and the quality of schooling ................................................................................ 8
4.1. Studies using randomized controlled trials ................................................................................................. 9
4.2. Studies using quasi-experimental techniques or panel data ...................................................................... 9
4.3. Studies using cross-sectional data analysis ............................................................................................... 11
4.4. Concluding remarks ................................................................................................................................... 11
5. Education decentralization case studies........................................................................................................... 13
5.1. Mexico ....................................................................................................................................................... 14
5.2. Indonesia ................................................................................................................................................... 17
5.3. Kenya ......................................................................................................................................................... 20
6. Prerequisites for success .................................................................................................................................. 24
7. Concluding remarks .......................................................................................................................................... 26
8. References ........................................................................................................................................................ 27
9. Appendix ........................................................................................................................................................... 31

Index of Tables
Table 1: Key Decentralization Reforms in Selected Developing Countries ............................................................. 4
Table 2: A Basic Introduction to Selected Identification Strategies........................................................................ 8
Table 3: Case Studies Factsheet............................................................................................................................ 23
Table 4: Summary of Selected Evidence on Decentralization and Quality ........................................................... 31

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1. Introduction
Decentralization is probably the single most advocated reform for improving the provision of basic
services such as education in developing countries. Proponents argue that by taking decision-making
“closer to the people”, decentralization in service delivery can increase relevance in decisionmaking and enhance accountability. Both of these, the advocates posit, can in turn translate into
tangible improvements in the quality of education.
The aims of this paper are twofold: (1) to investigate key trends in the evolution of education
decentralization policies since 2000 and (2), to examine the empirical relationship between
decentralization and educational quality. The paper addresses these aims by first reviewing the
decentralization experiences of several countries more generally, and then by undertaking detailed
case studies of Mexico, Indonesia and Kenya to illustrate how different approaches towards
education decentralization can result in differing quality outcomes. Over the past two decades,
developing nations have made rapid progress in increasing participation in schooling. Less progress,
however, has been made in ensuring that the education dispensed is of adequate quality. Enhancing
our understanding of decentralization’s potential in this arena can thus have broader policy
implications for how nations address the endemic low quality challenge in the future.
At the onset, it is important to establish that although education decentralization initiatives are now
ubiquitous, they are not uniform in content. Rather, there are countless configurations of
decentralization schemes across the globe, as reforms differ substantially based on what education
decision-making responsibility has been devolved and what level it has been devolved to. For the
sake of simplicity, this paper distinguishes between two forms in particular – decentralization of
education to (1) local governments and (2) schools. More formally, the first form is defined as “the
transfer of authority for decision-making, finance, and management to quasi-autonomous units of
local governments” (Litvack and Seddon 1999: pp. 3) specifically in the arena of education. The
second form, referred to interchangeably as school decentralization or school-based management
(SBM) in the text is defined as “..a form of decentralization that identifies the individual school as the
primary unit of improvement and relies on the redistribution of decision-making authority as the
primary means through which improvement might be stimulated…” (Malen et al. 1990: pp. 290)1.
This paper proceeds in the following manner. Section two briefly discusses the link between
decentralization and educational quality. Section three traces the popularity of the scheme over
time, highlighting that the 2000s have witnessed a deepening of reforms implemented earlier, an
enhanced focus on school decentralization interventions, and a notable increase in schemes in
Africa. Section four summarizes the findings of the relevant empirical literature. It argues that while
the evidence base is still limited in size and quality, a handful of rigorous evaluations lend support to
SBM’s potential in enhancing quality. Section five presents three case studies in order to showcase
different experiences with the intervention. It highlights that realizing decentralization’s potential is
often predicated on design and implementation, both of which in turn are often shaped by economic
and political conditions. Section six considers prerequisites; and the final section concludes.
1

See Rondinelli (1981) for a further categorization of decentralization to local governments into the forms of
deconcentration, delegation and devolution. See Leithwood and Menzies (1998) for a further categorization of school
decentralization into the forms of administrative control, professional control, community control and balanced control.

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Via this mechanism. the second generation literature on decentralization is in fact significantly less decisive of its benefits.2. 2. the chances of inequity and the lack of capacity of local governments and schools to deliver quality education (see Winkler 1989. The standardized delivery by central governments. whether or not it realizes this potential is usually predicated on how economic conditions and political forces shape the design and implementation of reforms. They further emphasize that inconsistent curricular and quality standards. Oates 1972). monitoring teachers to ensure that they are actually teaching. on the other hand. or by voicing concerns over poor performance to schools or local officials who have the authority to make decisions regarding its improvement. By borrowing arguments from the first generation literature on decentralization (see Tiebout 1956. This body of work proposes a world of self-serving officials and politicians whose incentives are crucial in determining the service delivery outcomes of the intervention (see Ahmad and Brosio 2009). local governments or schools could for instance improve learning by directing greater resources to customized areas of need. and the reluctance and inability of parents to make technical decisions on education matters may in fact reduce. In practice. following decentralization there is no guarantee that the quality of education will actually improve through either of these mechanisms. The lack of a clear theoretical prediction on how decentralization affects educational quality forces us to rely on the empirical evidence instead. Critics in this vein thus highlight the possibilities of elite capture. resistance from teachers’ unions. textbooks and teachers. Second. Of course. As this paper will demonstrate in later sections. This argument is more commonly expounded using a framework from the 2004 World Bank Development Report: Making Services Work for Poor People. supporters assert that decentralization can increase accountability in the education system by locating decision-makers closer to parents and the community. the effectiveness of education service delivery. This claim is usually based on two arguments: 1. is assumed to be unable to address these heterogeneous demands. this empirical scholarship indicates that the reform does have the potential to enhance learning. Decentralization and quality of education The production of education is a complex process. parents can thus affect learning by. However. In contrast to the optimism in the earlier literature. which indicates that decentralization creates a “shorter route of accountability” for service delivery by providing a direct link between citizens and providers. the quality of delivery often also depends on understanding what local learning challenges exist and on providing the right incentives to address these challenges. These stakeholders can then voice their concerns. proponents posit that decentralization of education has the ability to improve the quality of education. Fiske 1996). 3 of 34 . as well as monitor education delivery more directly. Besides inputs such as desks. not increase. for example. advocates contend that locating decisions regarding education closer to those responsible for delivering it can enhance the relevance of decision making through greater knowledge of local needs and preferences. through this route. or by tailoring class plans to focus on topics that local students appear to be struggling with the most. First.

In much of Latin America. which has supported the reform since the 1990s both through its advocacy and by dedicating a growing proportion of its financing to decentralization projects. Regardless of the explicit goals proffered by governments for decentralizing education. for instance. decentralization emerged as a tool for addressing ethnic diversity and conflict (World Bank 2008). In the former Soviet Union and Eastern Europe. Efforts in the 1980s and 1990s Amongst the earliest decentralizing nations. The innovative intervention was specifically driven by a desire to expand schooling after the end of a civil war (Jimenez and Sawada 1999). Thailand. This push is certainly evident in the World Bank’s strategy. most client countries have decentralized responsibilities to at least one level of lower government. both before and after the year 2000. Many others still were motivated by a Mexico (PEC) myriad of other factors. On the contrary.3. In other countries such as South Africa and Sri Lanka. Israel and Senegal have all experimented with the initiative in one form or another (Barrera-Osorio et al. 2009). decentralization formed an integral part of wider political democratization movements (Litvack et al. 3. for instance. According to World Bank (2008). sceptics observe that the programme has seldom been the result of grassroots pressure to improve the quality of education (Smoke 1993. In Asia. both stated enhancing school effectiveness as a key goal of the reform’s adoption (Bruns et al. De Grauwe 2005. decentralization of education authority accompanied the important shift from a command to a market economy (De Grauwe 2005). Table 1: Key Decentralization Reforms in Selected Developing Countries Decentralization to local governments Pre 2000 Argentina Bangladesh Bolivia Brazil Burkina Faso Chile China Colombia Ethiopia India Russia South Africa Sri Lanka Tanzania Uganda Post 2000 Albania Cambodia Indonesia Nepal Pakistan Rwanda Sierra Leone Vietnam Decentralization to schools Argentina Brazil El Salvador Guatemala Honduras Hong Kong Israel Mexico (AGE) Nicaragua Thailand Many school-based management interventions Benin Gambia accompanied the education reforms that were Indonesia decentralizing authority to lower levels of Kenya Madagascar governments. 2011). Qatar Senegal came from El Salvador in 1991 in the form of the Source: Author’s own compilation from literature celebrated EDUCO community school model. Table 1 highlights reforms for a sample of selected countries to illustrate decentralization’s prevalence. Just as widespread has been the adoption of school-based management practices – countries as diverse as Argentina. the impetus for transferring decision-making authority to local governments was usually a broader political or economic reform. King and Guerra 2005). One of the earliest SBM Niger efforts from the developing world. 1998). Hong Kong and Thailand were two of the earliest adopters of the school decentralization reform – interestingly. Estimates indicate that 4 of 34 .1. on the other hand. Evolution in education decentralization policies: impetus and popularity Decentralization has proven to be a popular reform in the developing world. these critics posit that education decentralization has instead usually been the consequence of a push from multilateral agencies to decentralize.

This popularity. Other scholars note that the earliest decentralizing nations were probably more concerned with dismantling large. 3.2.which are described in some detail below . have contributed to making decentralization even more popular today. A concomitant development has been the increased availability of data on student attainment. this paper presents three interrelated trends that have been particularly prominent in recent years – together.between 1990 and 2006.2. in a comprehensive survey of 83 empirical studies on SBM. Leithwood and Menzies (1998) argued that there was no evidence of any effect of the reform on student outcomes at all. Instead. Education decentralization in the 2000s Since the mid-1990s. the Bank’s commitment on projects with a decentralization component stood at approximately USD 32 billion. widespread issues of poor educational quality in developing countries on one hand. the persistent. however.characterize the kind of decentralization policy changes most commonly seen in the post 2000 period.1. Similarly. for instance. Deepening of decentralization efforts First. Shah et al. electoral accountability reforms were also adopted in a number of countries. there has been significant progress in the literature on education and decentralization. makes an inventory of all the education decentralization programmes that have been implemented since 2000 not only close to impossible. 5 of 34 . In a review of 56 studies published from the 1990s. which had decentralized its government system in the 1990s but held its first local elections for lower levels of government in 2006 as part of a deepening effort. costly bureaucracies than in specifically improving learning outcomes (Caldwell 2005). Glewwe and Kremer 2005). many more decentralization policies in this period involved the deepening of existing reforms. Another area for improvement that proved popular in the post 2000 era was that of fiscal design – countries such as Russia and Uganda. moved to formula-based allocations in order to improve transparency in their fiscal systems. these three trends . 3. A handful of studies now suggest that the scheme can be beneficial to educational quality after all (see next section). Consistent with this proposition is the fact that evidence on the efficacy of education decentralization at that point in time was still overwhelmingly pessimistic. (2004) noted that decentralization to lower levels of governments in some cases improved and in many others worsened service delivery. One type of deepening initiative commonly seen was that of strengthening legal frameworks for decentralization. Both in Brazil and in the Indian states of Karnataka and Andra Pradesh. Finally. and the strong push by donors towards achieving the Education for All (EFA) goals on the other. but also of limited analytical value in understanding policy evolution. for example. One prominent example of this is Burkina Faso. which has permitted more rigorous evaluations of the effect of decentralization on quality. new laws were promulgated expounding on local fiscal responsibilities. This has further invigorated enthusiasm for the reform amongst the stakeholders involved. Besides advances in these two sets of literatures. although there were a few notable fresh interventions such as those seen in Indonesia and Pakistan. spread over almost 90 countries (World Bank 2008). textbooks and blackboards are not enough to enhance learning (see Hanushek 1995. This consensus has understandably resulted in an enhanced focus by governments and donors alike on governance reforms such as decentralization instead. The most crucial development perhaps has been the growing consensus that inputs such as desks. for example.

One reason for the prevalence of this particular trend was the fact that most countries had already decentralized in some form or other by the late 1990s – for these countries. Unsurprisingly. a logical extension of broader education decentralization interventions that had already been implemented. 3. deepening was simply a form of organic growth in public sector reform. Examples of projects funded by the World Bank in this post 2000 era for strengthening previous education decentralization reforms. however. included: capacity building initiatives in Bolivia and Ethiopia. underwent decentralization to local governments in 1992. Similarly Mexico. reforms also provided grants that schools could use based on school improvement priorities set by these councils. A whole strand of literature in fact became dedicated to exploring these early instances of decentralization “gone wrong” (see Prud’homme 1995. these schemes involved the empowerment of school councils comprising of school teachers.g. implemented a Big Bang reform in the 1990s and supplemented it with school autonomy programmes in the early 2000s. and policymakers not only became more conscious of the incentives of different actors in the decentralization process. Increasingly. implementing SBM was a kind of deepening effort. donors altered their approach towards reform adoption . Of course. launched independent schools that were funded by the government but managed locally in 2003 as part of its experiment with school decentralization. The politics of the reform gained centrality in this new approach. it is important to note 6 of 34 . Stimulated by these challenges. advocated undertaking a political economy analysis in order to understand whether decentralization’s benefits could be realized in a particular context (for e. In many countries. and then went on to implement its biggest SBM programme in 2001. countries suffering from such challenges turned to the multilateral agencies that had advocated decentralization in the first place for both technical advice and funding support on how to strengthen their reforms. albeit not all. Many. one of the case studies described in detail later in this paper. Focus on school decentralization schemes School decentralization reforms in particular gained popularity in the past 14 years. In most instances. to name a few. The much more common reason. Qatar is an important example.2. The popularity of this form of decentralization is actually not that surprising . throughout the 2000s. the World Bank. In fact. as well as the second generation literature on decentralization that had by this time shifted from a normative stance to a more political economy approach. not all countries adopting school decentralization schemes decentralized education to democratic local governments first. unfunded mandates and serious issues in capacity and training. for instance. Scholars in this vein highlighted. was the multiple challenges most countries faced in their early experiments with the scheme. even the newly decentralized countries of Indonesia and Pakistan pursued deepening efforts through much of the 2000s with the assistance of the Bank. but also began to acknowledge their own role as political actors in the implementation of these schemes.the most optimistic evidence available today is in fact on SBM (see next section). among other challenges.particularly so in the late 2000s. parents and community members. weak or stalled implementation. Tanzi 1995). Nonetheless. Philippines. see Eaton et al. The emirate. and interventions targeting marginalized communities in Brazil. for example. misaligned incentives.2. which in contrast to the Philippines and Mexico is a constitutional monarchy. elementary decentralization support efforts in El Salvador. 2010).

Political reforms and increased stability in the region contributed significantly to these increased decentralization efforts. was accelerated in the 2000s forgiving the external debt of many African countries in exchange for their commitments to invest in basic education. Malawi. Chad and Benin all decentralizing elements of their education systems. three of the four prominent randomized controlled trials in the SBM arena in the 2000s were conducted in Kenya. the multiple programmes implemented in Africa often involved deepening of existing reforms such as those seen in Ethiopia and in Tanzania .3. Besides political reform. 10% of the World Bank’s education portfolio supported SBM initiatives (Barrera-Osorio et al. both of which resulted in significant shifts in political power in individual nations. the end of civil wars in the early 2000s prompted renewed interests in decentralization to local bodies.both countries launched programmes to strengthen capacity for their previously implemented schemes. further highlighting the increased decentralization activity in the region. In line with first trend. a significant increase in funding for social sectors in recent years also contributed to the decentralization activity in Africa (Gerschberg and Winkler 2003). on the other hand. The Highly Indebted Poor Countries debt initiative (HIPC). Similarly. 2009). for instance.that many of the evaluations of the intervention were sponsored by the Bank itself. stability after the end of genocide in the 1990s allowed the country to also embark on decentralization to lower tiers of government in the 2000s. In Congo and Sierra Leone.2. Other countries that had education decentralization projects funded by the World Bank in the post 2000 era in the region included: Cameroon. recent years have also seen African countries as diverse as Kenya. almost 50% of the 17 operations approved by the World Bank’s Education Sector Board contained school decentralization elements. Trends in the Bank’s education project funding are telling of this support. This increase in funds also encouraged the launch of decentralization programmes as most donors believed that the reform would provide the right institutional environment in which to expand access and quality (Gerschberg and Winkler 2003). Further. for instance. Chad. This general trend of political reform was more often than not accompanied by public sector reform in general. In the fiscal year 2012. The Gambia and Mozambique. who by this time had become a key supporter of SBM. By this time. countries such as Benin and Niger experimented with SBM during this period. the opposition party in Senegal won elections after 19 years of rule by the same party. for example. Between 2000 and 2006. and decentralization programmes in particular. Increased decentralization activity in Africa Finally. in line with the second trend. 3. Ghana. Similarly. In Rwanda. In 2000. slow progress in achieving the Millennium Development and the Education for All goals resulted in a large injection of donor funds through the Global Partnership in Education initiative in several countries in the region. Mali. Morocco. in Guinea. many nations in the region had embraced democracy and multi-party political systems. In addition. 7 of 34 . and Nigeria. to illustrate. the first civilian election since independence was held in 2010.

such as those that use difference-in-differences techniques or employ the use of panel data with fixed effects. as well as those that are (2) constant across entities but vary over time. Evidence on decentralization and the quality of schooling The previous section highlighted just how widespread decentralization is today. refer to Ahmad and Brosio (2009). 2 Source: Ravallion (1999). Thus. 8 of 34 . Because participants are randomly assigned. This section summarizes key studies that attempt to quantitatively establish a causal link between education decentralization and the quality of schooling. limited data availability. (2009). while at the bottom are mostly cross-sectional studies that are unable to control for biases common in this type of analysis. Varying reform content. Establishing causality is the hallmark of good impact evaluation. the evidence presented is organized by the established hierarchy of identification strategies in economics as widely taught in graduate programmes today (see Table 2 for a brief introduction to selected identification strategies). and the difficulty of disentangling decentralization’s effects from those of other reforms that tend to accompany it have severely restricted our ability to draw conclusions on what decentralization can and cannot do. For a review of empirical evidence from OECD and other developed nations. The key benefit of this method is that is allows us to control for differences between the treatment and comparison groups that are constant over time. at the top of the hierarchy are randomized controlled trials (RCT). before and after an intervention. see Channa and Faguet (2012). The evidence described in this section is summarized in the Appendix. or in a layperson’s terms. Cross-sectional This method relies on analysis using data data regression from a single period. the control group is similar in all respects to the treatment group except for the actual treatment applied. Along Channa and Faguet (2012). but is also increasingly employing more sophisticated methods to isolate the causal effects of education decentralization. repetition and dropout rates2. a strategy that permits the measurement of what would have happened had the participants not received the decentralization intervention (see Gertler et al. as measured by achievement scores or failure. For good reviews of the school decentralization literature. the evidence base in this arena is fortunately not only growing. Angrist and Pischke (2009) For a more comprehensive review of the literature on the relationship between decentralization and service delivery in developing countries. Unless complemented analysis by other techniques. the key benefit of this method is that it allows us to control for differences that are (1) constant over time but vary across entities. this method or experiment randomly assigns participants into treatment and control groups and then compares the difference in their outcomes to estimate causal effects. Randomized Considered the gold standard for establishing controlled trial causality in econometrics. And in the field of economics. Fixed effects This method also relies on using data over model on multiple periods of time and is technically panel data close to the difference-in-differences technique. In models using two way fixed effects. It relies on comparing the change in the treated group to the change in a plausible comparison group. the empirical evidence linking decentralization and quality of schooling is as yet limited in size and quality. (2011) and Barrera-Osorio et al. which are considered the “gold standard” in establishing causal links. see Bruns et al. In the middle category fall various studies that try to address biases through other methods. Difference-inThis method is considered a quasidifferences experimental technique. Table 2: A Basic Introduction to Selected Identification Strategies An identification strategy can be defined as the “manner in which a researcher uses observational data to approximate a real experiment” (Angrist and Pischke 2009: pp. That said. ascertaining whether relationships can be considered causal generally relies on employing what is referred to as a credible identification strategy – an empirical strategy that allows for the measurement of a counterfactual.4. 7). this method is unable to address estimation biases. In spite of this. 2007 for a more detailed discussion on establishing causality in school decentralization interventions).

They show a positive association between decentralization and Mathematics and Spanish scores . (2011) find that the training intervention had no effect on learning. there was no discernible impact on student test scores.2. and 0. which involved management reforms at three levels – district.17 standard deviations for linkage. 9 of 34 . Studies using quasi-experimental techniques or panel data Evidence using quasi-experimental from Argentina suggests that decentralization of education decision-making authority to lower levels of government can enhance student achievement. 4. they report a 4. There are. yet suggests that SBM can have positive effects on absenteeism. (2008) perform a difference-indifferences estimation. 2011). they posit that a minimum of 45% of adult literacy may be required before the intervention can yield positive effects on learning outcomes. there is no experimental evidence on education decentralization to lower levels of government. (2007). sub-district and school. The authors find that four years into the intervention. but by the end of two years find no impact on aggregated test scores. Duflo et al. nevertheless.1. Student test scores increased by 0. Argentina undertook devolution of personnel and budgeting decision to provinces as part of a broader structural reform. They conclude not against the reform per se. which was implemented in approximately 500 public schools (Pradhan et al. respectively. in addition to a combination of three initiatives including training. the RCT tested the impact of providing a block grant of approximately USD 800 to treated schools. one of which involved an SBM component that empowered school councils to hire and monitor contract teachers. four contributions that use randomized trials to investigate SBM’s potential in enhancing attainment. The most optimistic evidence is due to Duflo et al. election of SC members. Blimpo and Evans’ (2011) study of an experimental trial in The Gambia is marginally less optimistic. Glewwe and Maiga document some school improvements in the first six months. To explain the lack of impact on quality. Finally. and collaboration with the village council. respectively. Pradhan et al.22 standard deviations for linkage and elections (see also Indonesia case study). but that both the election and linkage interventions were successful. comparing changes in student scores in secondary schools that had always been under provincial control to changes in schools that were under federal control until the 1991 reform. In particular.9% increase compared to the mean. These four papers yield somewhat positive findings.after five years.18 and 0.9% and 6. In a sample of 30 districts.4. Galiani et al. Just as positive is a trial from Indonesia. who examine a randomized controlled trial from Kenya. The trial tested a number of interventions on 210 primary schools. sub-districts and schools were randomly sorted into treatment and control groups. Like many other countries. The Gambia experiment comprised of a grant and school training programme in 273 primary schools.24 standard deviations higher in Mathematics and Language than their non-treated counterparts (see also Kenya case study). compare the SBM groups to their counterparts in the control group to show that students in the treatment cell scored 0. Glewwe and Maiga (2011) present the least optimistic experimental results in this category. Studies using randomized controlled trials Understandably. arguing instead that results may be driven by the short time since implementation of the intervention. They do though report that the trial resulted in a 21% and 23% reduction in student and teacher absenteeism. They examine a randomized trial in Madagascar.

of which 25 are classified as high income nations. Khattri et al. albeit heterogeneous across countries based on income levels. the results of two cross-country studies on SBM are mixed. Skoufias and Shapiro (2006) are equally optimistic about school decentralization in the country.31 reduction in dropout. Hanushek et al. Gertler et al. Gertler et al. In contrast to the above papers in this category. Murnane et al. which provided funding as well as training to principals and parents. They find that financial autonomy is associated with a significant drop in repetition rates and also report positive trends in the mean level lags in grades attended and share of children with lag. arguing that participation in PEC is indeed related to improvements in quality (see also Mexico case study). head teacher election and establishment of school councils using data from 1981 to 1993. Their analysis suggests that participation in the AGE programme is associated with a reduction in the proportion of students failing and repeating a grade of 5. respectively.Four country studies that also rely on the difference-in-differences method use it to investigate the effect of school decentralization instead. but a positive one with parental participation. the treatment group showed a 1. Gunnarsson et al. They find a negative and significant association between test scores and school autonomy.school autonomy and participation . but to negative ones in developing and lowperforming nations mostly due to a lack of institutional capacity. (2006) and Bando (2011) concur.24 and 0. comparing schools that adopted AGE earlier to those that adopted it later. find the relationship between the parameters of interest to be negative. exploit the phased implementation of the AGE programme. From Brazil. who use data from four waves of PISA test scores to establish the relationship between student achievement and autonomy in curricular. They report that as compared to the control group. (2011). personnel and budgeting areas. failure and repetition rates. Paes de Barros and Mendonca (1998) study the three SBM changes of financial autonomy of schools.in 10 Latin American countries. compare the test score performance of students in schools that implemented the intervention in the first phase of implementation to those that implemented the intervention in a later phase. They combine their difference-in-differences method with a matching technique to examine the PEC programme. 0.45 percentage point improvement in overall attainment. and are similarly favourable. PEC is another SBM reform in Mexico that provides annual grants to disadvantaged schools to improve educational quality. 10 of 34 . A disaggregated analysis suggests that school autonomy is related to positive outcomes in developed and high-performing nations. The authors evaluate the impact of school-based management reforms implemented in 2003 in 23 districts in the Philippines. respectively. (2011) consider the AGE intervention from Mexico. They find that participation in PEC is significantly associated with a 0. The authors employ an instrumental variable technique in which they use principal attributes and legal structure of a country as instruments for school autonomy and participation. albeit not entirely pessimistic. (2010). which is an SBM reform that provides training and small grants to parent associations in disadvantaged schools to invest in infrastructure and materials.24. Using a two way fixed effects model.4% and 4%. Their dataset contains data on 1 million students from 42 countries. The second cross-country study is due to Hanushek et al. (2009) consider the effects of two components of school decentralization reforms . Equally supportive of school decentralization is an investigation from Asia by Khattri et al.

King and Ozler (2000) argue that it is not school autonomy on paper (de jure). with positive associations reported in Argentina and Russia but not in Chile or in a cross-country analysis. what does all the above evidence tell us about the link between the quality of education and decentralization of education decision-making authority to (1) lower levels of governments and (2) to schools? The evidence on the former link is limited in size and quality and is inconclusive at best. Treisman (2002). on balance the stronger evidence indicates that school-based management can improve test scores . finds that the presence of constitutional autonomy and electoral accountability at the local level are both associated with a higher level of youth illiteracy in data from up to 166 nations. failure or dropout rates . They find no significant difference in test scores.as it did in Mexico and Brazil. 11 of 34 . So. still finding no impact on student achievement but noting significantly lower teacher absenteeism. Di Gropello (2002) shows conflicting results on the impact of municipality level devolution on quality in Chile. Eskeland and Filmer (2007) find that autonomy is indeed significantly associated with student test scores in Mathematics. In a similar vein.as it did in Kenya. but rather autonomy in practice (de facto) that that improves student performance. Freinkman and Plenakanov (2009).4. Sawada and Ragatz (2005) use a different econometric technique on the same dataset. find that the statistical relationship between test scores of students from Russia and regional fiscal decentralization is consistently positive. while greater financial autonomy is not. The authors report marginally lower dropout and repetition rates and higher Science achievement.as well as reduce repetition. Indonesia and the Philippines .3. for instance. perhaps the most celebrated case of SBM. Further. Moreover. on the other hand. but no change in Mathematics and Language scores. In a follow-study. Studies using cross-sectional data analysis The studies employing primarily cross-sectional data analysis are not unanimous where the benefits of decentralization to lower levels of government are concerned. Di Gropello and Marshall (2005) assess the impact of participating in a PROHECO community school in Honduras. In an examination of SBM in Nicaragua. Using more nationally representative data. Meanwhile. evidence from The Gambia indicates that decentralization can reduce both student and teacher absenteeism. although do observe that student absenteeism is lower in EDUCO schools. but not in Language. In neither case were results significant for Spanish. on the other hand. Parker shows that third graders in autonomous schools scored significantly higher than their counterparts in centralized schools in Mathematics. Jimenez and Sawada (1999) examine EDUCO from El Salvador. but for sixth graders this effect was negative. Concluding remarks Answers to policy questions should place a greater weight on what higher quality evidence has to say. 4. Numerous country-level contributions from the Latin American region also report contradictory findings on the impact of school decentralization on quality. Parker (2005) provides mixed support for the same reform. in which community schools were established to enhance access in rural areas. Evidence on the latter is fortunately significantly larger. they contend that EDUCO students also have higher continuation rates. She finds that both devolved wage incentives and training expenditure at the municipal level are associated with higher scores.4. In Argentina.

randomized trials from Madagascar and The Gambia respectively demonstrate that interventions may take time to be beneficial or may be predicated on prerequisites such as community literacy. motives for. They do so by exploring the different contexts of. These prerequisites to realizing the benefits of decentralization.That said. the detailed case studies that follow in the next section consider why this might be the case. In addition. mixed findings from cross-country analyses of the Latin American region and of 42 countries participating in PISA suggest that the effect of SBM may be heterogeneous across countries. Thus. 12 of 34 . as well as others suggested in the literature. and nature of decentralization reforms in Mexico. Indonesia and Kenya. are briefly discussed in the final section of this paper.

however. design and implementation issues are commonly acknowledged to not only have limited decentralization’s potential in enhancing learning. equity in education. evidence on the efficacy of the Indonesian reform is both thin and contradictory. yet has continued to struggle with poor levels of educational quality. Indonesia and Kenya. In sharp contrast to this. the strongest evidence in favour of school decentralization. is optimistic – multiple studies indicate that SBM interventions have been successful in improving both quality and crucially. the vested interests of a powerful teachers’ union as well as a change in political leadership in the 2000s. Indonesia. which has resulted in poor accountability on one hand and excessive redundancy on the other. They are dissimilar in almost all other respects . and varying models of education decentralization. the case studies highlight that design and implementation have the ability to alter decentralization’s effects on quality. the continued fluidity in this case exemplifies the status of several countries that have demonstrated a renewed interest in decentralization in the post 2000 period. The Indonesia case study thus illustrates the importance of both these elements in the success of decentralization schemes. 13 of 34 . but to also have contributed to increasing inequity. Kenya’s experiment with decentralization is in flux with reform implementation still underway. Since the 1980s the government has been gradually decentralizing more authority to local governments. a lower middle income country.they represent different geographies. also hails from Kenya – this evidence highlights the potential of decentralization if the country can get its policy right. Counterintuitively though. implemented a “Big Bang” decentralization scheme in 2000 with the assistance of the World Bank. They also demonstrate that design and implementation policies in turn are usually shaped by economic conditions. although Mexico’s education system continues to be criticized for being too centralized. Each case study that follows briefly describes the context prior to decentralization. Education decentralization case studies The three case studies in this section describe the distinct approaches to education decentralization adopted by Mexico. its actual content and evolution in design and finally the evidence available on how the scheme has affected the quality of education. However. political parties and teachers’ unions. while also emphasizing some unintended consequences of the reform on equity. The Mexico study describes the case of a middle income country whose decentralization trajectory has been significantly influenced by prevailing economic conditions.5. Evidence on the nation’s school decentralization initiatives. Importantly. differing levels of income. the low income country has lacked a consistent decentralization strategy. Table 3 follows this text with a summary of key comparative statistics for each country. Unlike Mexico and Indonesia’s experiences with decentralization. as we saw in the previous section. the motivation for the reform itself. The three countries are similar in that each one of them has achieved a satisfactory level of primary enrolment. as well as the politics of key stakeholders such as donors. Historically. its education system today is an incoherent mix of centralized and decentralized elements. Together. Consequently.

The SNTE was a powerful political actor in the education arena that had been closely aligned to the ruling political party for many years (Murillo 1999). Early decentralization efforts The debt crisis of 1982 and the economic crisis of 1994 both affected Mexico acutely. Mexico At the primary level.5. The second.1. 2006). The first came about in 1978. Thus. As part of the agreement. announced the transfer of basic education to the states. Importantly. the governors of all 31 states. As part of these adjustment programmes. The fear of losing the power of collective bargaining prompted the SNTE to oppose efforts to decentralize through much of the 1980s. net enrolment in Mexico had reached close to universal as early as the mid1980s. and tests showed that students learned less than in other regions (Murillo 1999). The region had one of the highest repetition rates in the world. Mexico’s 15 year olds statistically outperformed their counterparts in mathematics in just three other countries (PISA website). Educational institutions at this time were notorious for their rigidity. inefficiency and unresponsiveness (Murnane et al. Although there appeared to be no grass roots movement for the reform at the time. However. 14 of 34 . wage negotiations were allowed to remain centralized. quality in the education system remained poor even after taking the country’s lower level of development into account (Hagerstrom 2006). reform was enacted in 1992 through the National Agreement for Basic Education Modernization. Mexico’s government instead negotiated significant concessions to gain union support. in his inaugural speech in 1982.1. Out of the 32 countries that participated. The agreement was signed by the federal government. The first PISA test in 2000 confirmed this lack of learning almost all Latin American nations underperformed on the assessment. and involved the deconcentration of the federal government’s Public Education Secretariat (known as SEP) to the state level. 5. states formed education delegations that collected basic data and performed regional planning roles under the auspices of the SEP (Ornelas 2000). citing the goals of improving quality and equity. Poor quality in fact plagued the education systems of most Latin American nations at the time. Mexico began to pass autonomy to states in the early 1980s (Ornelas 2000). it legally transferred the education secretariats to state control. The education system itself underwent two key reforms in this early decentralization period. A critical aspect that shaped the content of the Mexican reform was the role played by the national teachers’ union or SNTE. Through this deconcentration. much to the delight of the SNTE (Hagerstrom 2006). as well as a broader shift towards a more open economy. President De la Madrid. compared to other OECD countries. Thus. While decentralization efforts in other Latin American nations continued to be stymied due to a similar resistance by teachers’ unions. Mexico thus embarked on a series of adjustment programmes to reduce government expenditures and raise revenues throughout the 1980s and 1990s (Murillo 1999). development agencies such as the IADB and the World Bank welcomed these interventions as they fit in with their own priorities (Ornelas 2000). through the 1992 agreement.1. and the national teachers’ union. SNTE consented to the reform in exchange for wage increases and new schemes to support career progression (Ornelas 2000). and significantly more substantial.

the Centre continued to maintain control over the curriculum. On the expenditure side. lose power to the opposition. With this change in political leadership. financial transfers to states were determined by annual negotiations rather than transparent criteria-based formulae. Historically.states effectively gained control of only 10% of expenses as the other 90% comprised of teachers’ salaries. devolution was likewise limited . arguing that decision-making in fact became even more centralized as a result (Gerschberg 1999). Moreover. parents and community members (Ornelas 2000). 2009). By 2004. comprising of teachers. however. which had ruled for over 70 years. quality improvement initiatives had been implemented in a uniform manner across all schools.). The involvement of parental associations in implementing and monitoring of the grant was mandatory. Although participation in PEC was voluntary and any primary school could participate.Sceptics criticized the decentralization scheme. 15 of 34 . Financing remained predominantly federal at over 80% well after the reform’s implementation (ibid. Besides authority over personnel. 2006).000 to implement these plans (Skoufias and Shapiro 2006). AGE gave cash grants of USD 500 to USD 700 to school councils in highly disadvantaged communities to spend on avenues they considered appropriate (BarreraOsorio et al. in 1996 Mexico launched the Apoyo a la Gestion Escolar (Support to School Management) or AGE initiative. in the first four years. The key SBM type reform adopted as a result was the Programa Escuela de Calidad (Quality Schools Programme) or PEC intervention. The lack of meaningful devolution was evident in the financial arena as well. To mobilize them and also as part of a broader equalization programme for schools. some 2000 schools participated in the programme (Murnane et al. The 1992 reform also called for the establishment of councils of social participation of education. the number of participating schools had increased to 20. remained dysfunctional for a long time. while in the fifth year most of the grant went to teacher training and development (ibid. testing. These councils. In spite of this.1. In 2001. Additionally.2.). AGE did represent the first time such authority was devolved. Although the authority given to parents and schools was limited. which were determined centrally.000. some states made efforts to further decentralize to the municipal level. however. the country’s political system remained one of the most centralized in the world (Grindle 2007). 80% of the grant had to be spent on infrastructure and learning materials. which is over 10% of Mexico’s public school (Skoufias and Shapiro 2006). 5. the programme did target disadvantaged urban schools. which was implemented in 2001. and budgeting. while the Centre itself also bundled modest increases in state autonomy into other education reforms. the education bureaucracy became open to new education policies and procedures (Murnane et al. Over the next decade. The PEC intervention empowered school management and parents to jointly develop a five year quality improvement plan for a school. Decentralization in the 2000s The year 2000 saw the dominant political party. Grants were generally meant to be used on infrastructure projects and parents had to commit to greater involvement in schools. 2006). and then provided annual grants of up to USD 15.

Although it was considered by many as a weak form of SBM-type reform (see Bruns et al.09 and 0. 2011). In addition. Moreover. schools that participate in PEC for five years show increases in Math and Spanish scores of 0. Skoufias and Shapiro (2006) use panel data from 2000 to 2003 to examine the relationship between participation in PEC and educational quality. highlight that it takes time and experience with SBM reforms before benefits can be realized.24 points and repetition rates of 0. Through qualitative research. They report that although AGE affects indicators of schooling quality positively in poor communities. On the other hand. which not only takes into account dropout outcomes data up to 2006 but also incorporates data on standardized test scores. Authors not only conclude that it limited corrupt practices and improved school infrastructure and security (Skoufias and Shapiro 2006. find no significant relationship between PEC and student failure rates. Interestingly.33 percentage points. Both results. most likely due to the restricted content of the reform implemented. Three years of participation reduced dropout rates in these schools by an average of 0. (2006) use a similar econometric methodology but add data for an additional year of PEC participation to corroborate the previous study’s positive findings. they also demonstrate that PEC participation facilitated the largest reduction in dropout rates in states with middle values on the human development index. the PEC intervention has been widely evaluated. failure rates of 0. but three papers also use quantitative analysis to argue for a causal relationship between participation in the PEC programme and improved educational quality indicators. Conversely. In the first. Murnane et al. They find that impacts are larger in the first three years of primary school. In the second evaluation. 16 of 34 .4% and of repeated a grade by 4%. on average PEC participation is not significantly related to student achievement. Effects on quality of schooling The literature examining the effect of decentralization to local governments on the quality of education is limited. Her findings on the former indicator supports the results of the previous two evaluations – PEC participation is related to a reduction in dropout rates. 2009).24 points. They report that each year of participation in the PEC programme resulted in a decline in the dropout rate of 0.1. the authors investigate whether the effect of AGE differs by socioeconomic status of communities.07 standard deviations.31 points. Exploiting a phased roll-out of the intervention. The authors posit that this difference may be due to the varying levels of capacity in education departments of different states. On the other hand.3. However. Bando (2010) provides the third evaluation. respectively. she argues. Gertler et al. it has no effect in the poorest of communities.11 percentage points. Bruns et al. a rigorous evaluation of the AGE programme also yielded positive findings. They adopt an econometric technique known as difference-in-differences with matching to find statistically significant decreases in dropout rates of 0. as the largest SBM reform in Mexican schools. the magnitude of which increases as schools get more experience with the programme. (2011) find that AGE reduced the proportion of students failing by 5. Murnane et al. They postulate that his may be due to the parents in the poorest communities lacking the “ability and stature to voice and assert their preferences” (pp. states with low values on the human development index had negative values in the initial years that became positive in the later years but was never statistically significant. 11). the paper also suggests that the channel for improvement is the increased participation of parents in decision-making.5.

17 of 34 . Although many authors contend that the evolving political landscape and growing dissatisfaction within provinces over power-sharing were the main driving forces behind the decentralization (see for e. Concluding Remarks The 2012 PISA results for Mexico are encouraging. international agencies also played a prominent role in its implementation. 55% of students still do not meet the benchmark for mathematics.2. remained poor with most students leaving the education system without the necessary literacy and numeracy skills (Behrman et al.). the performance of Indonesia’s eighth grade students stood below international standards. Besides quality.1. Decentralization has undoubtedly contributed to this progress. According to the 1999 TIMSS study.5. The main challenge in the future will be to improve overall educational quality without negatively affecting this above average equity. Decentralizing Indonesia In the aftermath of the Asian Financial Crisis in the late 1990s. Moreover.g. Simatupang 2009). the scheme also passed responsibility of service delivery. autocratic rule under Suharto and encompassed sweeping electoral. inflation increased and there was a significant contraction in Indonesia’s economy. accountability in service delivery was further enhanced by electing. together with other education initiatives on nationalized testing. targeted SBM programmes for disadvantaged schools have contributed to improving opportunities for students with a low socioeconomic status. Indonesia promulgated two ground-breaking laws on decentralization as part of a broader democratization reform. equity was also a subject of great concern in the pre-decentralization era – remote parts of the populous island nation suffered from a lack of resources such as desks and textbooks (UNESCO 2006).4. 2011). down to over 30 provinces comprising of more than 400 districts. That said. 5.1. however. the heads of these devolved local governments (Skoufias et al. while disparities in enrolment at the secondary level between the children of the richest and the poorest 20% of households were a significant 37 percentage points (Kristiansen and Patrikno 2006). Importantly.2. with an average score in mathematics of 403 against the benchmark of 500 (TIMSS website). governance and constitutional reforms. and early education. instead of appointing. 2002). Much of the literature on the decentralization scheme from the country indicates that greater autonomy devolution to states and schools over financing and human resource management may have to ability to yield additional benefits. Quality of schooling in the country. the rupiah was devalued. This mounted pressure on government expenditure for the public education system (Behrman et al. Both performance in mathematics and equity in educational opportunities improved dramatically compared to previous years (PISA website). Beginning in 2005. leading many to proclaim it as a model of excellence for the rest of Asia. The nation’s “Big Bang” decentralization followed almost three decades of highly centralized. The crisis also posed the additional challenges of maintaining enrolment and ensuring progression to higher levels. Indonesia By the middle of the 1980s Indonesia had achieved universal primary enrolment. indicating that there is room for quality improvement in the education system yet. one fifth of the country’s districts had junior high participation rates that stood at lower than 60% (ibid. teacher training and accreditation. including education. On the equity front. 5. In 1999. 2002).

Teachers themselves were meant to maintain control over pedagogy. This local financing. block grants were issued by the government that could be used based on a school’s own priorities. Districts were. Moreover. To further establish the autonomy of the school. as well as over implementing evaluations (King and Guerra 2005). as well as the authority to hire and dismiss contract teachers. Because teachers were civil servants. Whereas earlier SCs had only raised funds. Local governments thus continue to rely heavily on central transfers or block grants. committees were now given the enhanced task of providing input on all school matters. Education decentralization reforms Although the Indonesian government had already demonstrated its commitment to education by making nine years of schooling compulsory in the 1990s. recommend promotions and provide supplementary benefits and incentives (UNESCO 2006). 2011). As is common in most decentralization programmes. This of course changed dramatically with the implementation of the decentralization scheme in 2001 when districts became responsible for establishing new schools and for setting local education policies (World Bank 2012). Indonesia incorporated important school-based management principles into its education system (World Bank 2012). Following decentralization. changes were also made to financing. District governments were given the responsibility of employing all teachers in the public schooling sector (with the exception of those for madrasah schools). remained limited and to date represents only 10% of total local revenues (Skoufias et al. salary levels and ranks continued to be set centrally. learning plans and the selection of textbooks as long as they met the minimum standards set centrally (UNESCO 2006). curriculums and education calendars. the education system had remained extremely centralized.2. 5.Not only was education decentralization on the list of recommendations made by the World Bank to deal with the issues of low quality and increasing financial pressure of schooling (Behrman et al. Most studies in recent years have focused on improving the fiscal design of the initiative. 2002).3. Simatupang (2009) is an 18 of 34 . allowed to generate their own taxes and also borrow within limits (UNESCO 2006). Schools were given the authority to manage operations such planning and budgeting. Effects on quality of schooling The evidence base on the impact of Indonesia’s ambitious reform is thin and contradictory. district governments could transfer teachers. Unlike the previous case study of Mexico in which the central government did not devolve any staffing decisions to lower levels of governments. but the broader reform also served as a key condition in the post-crisis IMF rescue package offered to Indonesia (Kristiansen and Pratiko 2006). participating in the management of funds given to schools and collecting additional money in support of education. Indonesia’s reform also made provisions for sharing the human resource management responsibilities for teachers.2. although a move towards formula-based grants to provinces and districts has been made. the Centre continued to maintain control over setting and maintaining national competency standards.2. 5. Nonetheless. schools were mandated to form school committees (SC) of parents and prominent community members. for example. Through regulations and additional directives in 2003 and 2005. rather than on the rigorous evaluation of the outcomes of decentralized service delivery. nonetheless.

2011).4. a randomized controlled trial on the subject suggests that providing block grants together with election of SC members and/or linkages with a village council can result in significant improvements in achievement (see Pradhan et al. Using data from 1994 to 2006. there are several other challenges that may be preventing decentralization’s benefits from being realized in Indonesia.important exception. Where they did exist. and parents tended to be overly deferential towards school management on decisions (World Bank 2012). Along a different vein. meetings between the principal and full committee members were rare. school management and district officials interviewed for a comprehensive World Bank study in 2012 concurred – they noted that block grants had had a positive effect on transition rates to junior high schools. One key issue in the country has been uneven implementation. SC members. Devolution had originally been propagated as a means of clarifying the ambiguity and redundancy prevalent in the system previously. Yet. more district-level budget surpluses and greater expenditure on education. On the other hand. more improvements in quality would have been likely. Kristiansen and Pratikno (2006) study four districts to provide moderate support for the intervention’s perceived impact on quality of education. She uses a quasi-experimental methodology to find an overall statistically significant reduction in drop-out rates at the primary and high school post decentralization. Where SBM is concerned. (2011) for instance find that although electoral reforms have resulted in higher revenue generation from own sources.2. Based on the results of over 500 household surveys. A final area where Indonesia has struggled has been on fiscal design and transparency. the World Bank study mentioned above yields similarly pessimistic findings. Take school councils for instance. they report that 81% of parents believed the quality of their children’s schooling had improved after the reform. A related implementation concern has been a lack of clarity in the roles and responsibilities of the different layers in the education bureaucracy. 2011). Decentralization challenges Besides a short time since reform. Many schools did not have an active school committee for several years after the reform was implemented (Pradhan et al. Simatupang reports that more than half of Indonesia’s municipalities experienced changes in education outcomes in the post reform period. yet there remained considerable overlaps between roles in the sector even after the intervention (Kristiansen and Pratikno 2006). World Bank 2012). members had often been selected instead of being elected. It concludes that the status of SBM implementation in schools was not statistically correlated with student test scores. 5. This finding indicates that had implementation been stronger across the board. enrolment rates of poor students and had overall also improved student academic performance. Toi (2010) highlights that the disparity in revenue sharing between local governments actually widened as a 19 of 34 . Both investigations suggest that a short time since implementation may be the key reason why benefits of decentralization are not discernible. Even years after reform implementation. there are those who show that the impact of decentralization reforms has been limited to date. there was no significant impact on service delivery outcomes in the two years following implementation. Skoufias et al. several reports indicate that both government officials and SC members were unclear about their responsibilities (Brodjonergora 2004.

they have not been sufficient in addressing the equity challenge. 2012).2. 2013). More capacity building and training. even after decentralization inequalities based on socioeconomic status and geography have persisted (Kristiansen and Pratikno 2006). The higher enrolment did not imply higher quality – according to one of the few assessments available in the country. The above suggests that a lot more remains to be done if Indonesia wants to enhance student learning. Although the Centre has supported the Periphery through special funds allocated to national programmes on education. Early decentralization efforts At the time of independence in 1963. However. together with the abolishment of school fees in primary schools in 2003 resulted in large increases in enrolment (Bruns et al. Many note that he did this in order to prevent other ethnic groups from building local power bases that could challenge his rule 20 of 34 .1.3. Quality of education remains low . The original constitution of the nation thus built on this existing system and provided for strong provinces that were charged with some responsibilities surrounding delivery of basic services such as primary education (Rocaboy et al. local government officials often also remained unclear about what level of funding was available to them (King and Guerra 2005). shortly afterwards. This stability. A lack of self-sufficiency in revenues and the inadequacy of the transfer grant from the Centre have further resulted in a notable neglect of development expenditures at the local level (Brodjonegora 2004). Due to the lack of transparency. imperfections in the formula imply that the equalizing property of these grants is weak (Hofman and Guerra 2005). 5. 5. as well as enhanced transparency and horizontal accountability may thus be useful in improving decentralization’s ability to address these concerns. Kenya inherited a system of local government from the British. 5. Kenya On a continent where coups and revolutions were prevalent.result of decentralization. Although transfers to local governments are now formula-based. even five years after decentralization no expenditure data had been made available to local oversight bodies or the civil society. and had been well supported by a decent revenue base and central government grants (Menon et al. 2008). Kristiansen and Pratikno 2006). Gross enrolment ratios at the primary level crossed the 100 mark in 2003. and by 2005 primary net enrolment had risen to approximately 75 (UIS). had performed reasonably well in the provision of basic services. thus resulting in a total lack of accountability on this front.the country ranked second last on the PISA 2012 mathematics achievement test (PISA website). decentralization has not been a panacea for Indonesia’s quality challenges. the country’s first President initiated changes to the Constitution to limit the authority of provinces. scholars highlight that there are serious issues related to poor teacher attendance and corruption in the bureaucracy (UNESCO 2006. Kenya had witnessed noteworthy economic and political stability up to the 1990s (Smoke 1993). according to Kristiansen and Pratikno (2006). in 2006 only three out of 10 children in third grade could read a story in English or do simple division calculations from the second grade curriculum (Bold et al. These local governments had functioned primarily during the interim years before independence (1960 -1963). Besides inadequate facilities. Concluding Remarks Despite its promises. Moreover.3. On the equity front. thus increasing inequity in education.5. 2011).

2008). 2008. the government argued that centralization in service delivery was necessary to not only promote tribal unity in an ethnically fractionalized nation. In 1966. financial allocations to local bodies were dictated by political decisions rather than a transparent formula. (2003). 2003). Moreover. According to Kremer et al. the government had made an open commitment indicating that if local communities built schools and kept them functioning for a short period through Harambee. Recommendations made by the IMF to stop the weakening of local governments in the 70s and 80s continued to be largely ignored by the ruling regimes. educational quality. Over time. a commission charged by the President recommended ambitious reforms to empower local governments. corruption and weak citizen participation (Smoke 1993. the disconnect between local authority and central financing resulted in more than an optimal number of schools and less than an optimal level of financing for non-teacher inputs. Ostensibly though.22 in 2000 (Rocaboy et al. the initiative 21 of 34 . but also to address increasing financial pressures and poor service delivery performance (ibid. Both of which probably reduced. the system had evolved into a mix of centralized and decentralized elements. To promote enrolment in the early years after independence in particular. and government responsibilities were increasingly recentralized. which abolished most of the financing provided to the Periphery. They elaborate that although this open commitment allowed a rapid expansion in education. The local governments with their limited decision-making authority nonetheless continued to exist side by side a deconcentrated central government system that had been responsible for implementing directives made by the Centre since independence (Menon et al. The share of spending by local governments to GDP thus fell from 3. the Centre would allocate teachers to these schools. 2008). Ad hoc amendments and approvals given had resulted in an inconsistency in the services that had been devolved to local bodies in different geographies. 5. and took away their control over primary education (Smoke 1993). Critics highlighted the related issues of a poor institutional environment. To address some of these concerns. the Kenya Local Government Reform Programme (KLGRP) was launched in 1995 with the assistance of donors. By the early 2000s. 2013). Menon et al. But rather than implementing these reforms. low capacity building. rather than enhanced. for example.3. the way this local institution was used created distortions in the system. The centralization of the broader system notwithstanding. and redundancy between the local government and deconcentrated system persisted in many key functions (Smoke 1993. 2012). further adding to the opacity of decision-making. however. Harambee literally translates to “Let’s pull together” and is a movement with precolonial roots that encouraged local communities to work together to raise funds for schools and other public goods (Kremer et al. Bold et al. Rocaboy et al.(Kremer et al. education in Kenya had always incorporated at least some decentralized community control of schools through the institution of Harambee. Decentralization in the 2000’s By the 2000s. the local governments became more and more marginalized (Menon et al.).2. in 1969 the parliament implemented the Transfer of Functions Act.26 percent in 1970 to a mere 1. in spite of both local and international pressure to strengthen them. Its goal was to streamline the delivery of services and increase the financial resources available to local governments. 2003). 2013).

Until recently.3. there remained restrictions about how local governments could dispose of these increased funds. as yet remains to be seen. Effects on quality of schooling Given the status of decentralization in Kenya. Kenya not only needs a strong legal framework for decentralization. an attempt was made by the government to establish a new decentralization framework into the Constitution in 2005 (Menon et al. the fate of decentralization in the country still remains in flux.4. To convert this potential into reality.). Given these recent changes. How successful these efforts will be in the area of education delivery. local bodies had limited constitutional authority. not on service delivery outcomes. The move added yet another alternative type of local bureaucracy to compete with local governments and the deconcentrated administrative system (ibid. In August 2010. and created redundancy in education service delivery. (2007). piloted between 2005 and 2007. Of course many of these initiatives are already underway with the adoption of the new Constitution and a renewed interest in education decentralization.was successful in giving at least some financial independence back to local bodies (Rocaboy et al. and the multiple institutional arrangements that existed at the local level both diluted accountability. 2013). A new local government law was also drafted to clarify the role of local bodies (Rocaboy et al. an experimental trial does suggest that SBM type reforms have the potential to improve educational quality in the country. A concomitant directive also delegated authority to electoral districts or constituencies to develop local projects for service delivery under an elected member of parliament. Because the legal basis for local governments was still grounded in the original 1963 Local Government Act. 2008). much of the literature on the topic from the country focuses on design issues and challenges. 2013). Yet. a new government promised a renewed commitment towards devolution. Understandably. the effect on test scores was larger in schools that had received training on monitoring teacher performance. 22 of 34 . The one exception is due to Duflo et al. 5.3. however. reduce distortions in the system and substantially enhance the authority of local governments and schools. The authors evaluate a randomized controlled trial of an additional teacher reform with an SBM component that was implemented with funding assistance from the World Bank and a regional NGO.3. very little can be said about the relationship between the intervention and the quality of education. yet another Constitution was proposed and approved through a referendum for gradual implementation – this Constitution restores decision-making autonomy to local bodies. Moreover. However. 5. but also has to rationalize service delivery. Kenya’s government is finally decentralizing. thus indicating support for SBM-type initiatives. In 2003. Concluding Remarks Some thirty odd constitutional amendments later. The intervention. provided funds to 140 schools to hire an extra teacher for primary school. The provision failed to win a popular vote referendum. PTAs in half the schools were then randomly selected to receive training on monitoring the contract teacher. The authors report that students in all the schools that received an extra teacher performed better than those that did not. as well as on soliciting performance information. The authors also note a reduction in overall teacher absence as a result of the intervention.

decades Reforms in flux since then Weak to Moderate Moderate Weak Local governments responsible for education Local governments responsible for education Local governments have in the past few delivery but fiscal and human resource delivery but fiscal devolution limited decades had little authority over education devolution limited delivery. Evidence base thin overall.200 (2013 estimate) Lower middle income 45 million (2014 estimate) USD 1. with additions through next two Original local government act in 1963.600 (2012 estimate) World Bank classification Middle income Key Education Statistics (year recorded in brackets) 254 million (2014 estimate) USD 5. contract teachers suggests improvements in quality. Indicates that Evidence base thin and contradictory. Statistics are from CIA Factbook. Then unitary republic Big bang in 2000. System highly centralized Moderate Moderate Moderate in specific aspects AGE and PEC interventions both give grants Local councils receive BOS funds and are Harambee system gave communities control as well as some authority over how to use allowed to use based on school priorities over establishing schools. Source: Author’s own compilation. both AGE and PEC participation enhances RCT on SBM type intervention of monitoring schooling quality.Table 3: Case Studies Factsheet Mexico Indonesia Kenya Population 116 million (2013 estimate) GDP per capita (PPP) USD 15. Then unitary republic 1992. RCT tested a funds stronger form of SBM Evidence base on SBM strong. with additions through 2000s Basic Information Governance and Decentralization Independence date Government structure Decentralization reform date Education decentralization content SBM content Impact on quality 1963 from British rule Federal in first year after independence. UNESCO Institute of Statistics and PISA websites 23 of 34 .800 (2013 estimate) Low income Primary GER Secondary GER Primary NER Secondary GER Survival to end of primary Achievement statistics 104 (2011) 84 (2011) 96 (2011) 67 (2011) 95 (2010) PISA 2012 mathematics – ranked 53 out of 64 nations tested 109 (2011) 81 (2011) 94 (2011) 75 (2011) 88 (2010) PISA 2012 mathematics – ranked 63 out of 64 nations tested 112 (2009) 60 (2009) 82 (2009) 50 (2009) 78 (2004) No international comparisons available 1821 from Spanish rule Federal republic 1945 from Dutch rule Federal in first few years after independence.

Rather. Further. schemes that encourage accountability. can go a long way in reducing gaps in opportunities between students of rich and poor backgrounds. Conversely. 2009) and Central America (Di Gropello 2006) indicates that successful SBM applications spent considerable time in training their school councils. Additionally. the empirical evidence has provided support for many of the other prerequisites suggested in the policy literature. Compensatory programmes. Another prerequisite that has seen growing support from the empirical body of work is capacity building and training. 2011).6. (2005) and Olken (2009) support this line of reasoning. WDR 2004. build capacity as well as foster key stakeholder buy-in are the ones that are able to actually enhance service delivery. much of the empirical evidence points to the importance of a continued role for the Centre. As a consequence. many participatory mechanisms remained inactive several years after implementation. are designed with the local context in mind. Yet in many countries such as Pakistan (Cheema 2007) and Indonesia (Pradhan et al. for example. 2006) also demonstrates that factors such as literacy of the community. inherent characteristics of populations shall as ethnic diversity have been shown to restrict the efficacy of community participation in countries like Kenya (Miguel and Gugerty 2005) and Ghana (Akramov and Asante 2009). there is also evidence that some level of vertical accountability may actually enhance outcomes. such as those implemented in Mexcio. decentralization does not imply that the central government should abandon its role altogether. Empirically. Evidence from Gambia (Blimpo and Evans 2011). 2011) and Mexico (Murnane et al. Peru (Loayza et al. in contexts where there is widespread social inequality. Prerequisites for success A large policy literature suggests that decentralization reforms that are incomplete. it may be important to take steps to prevent projects from falling into these common pitfalls. Studies on school decentralization from El Salvador (Jimenez and Sawada 1999) and Honduras (Di Gropello and Marshall 2005). Research from Bolivia (Faguet 2004) indicates that community oversight is particularly important for decentralization schemes to be effective. 24 of 34 . Caldwell 2005). poorly implemented or lacking in strong political sponsorship are seldom successful (see Litvack and Seddon 1999. respectively. Besides continued efforts towards capacity building as mentioned above. Moreover. the capability of local government officials. thus limiting reform success (see Prud’homme 1994). Both Chaudhury et al. chances of elite capture usually increase. In order to ensure that community participation and oversight do in fact translate into greater accountability. governments have been increasing efforts on this front and rightly so. Research from Kenya (Duflo et al. While it is important that adequate decision-making authority over say financial and personnel matters be devolved to the appropriate level. another area that probably requires the Centre’s involvement is equalization transfers that help to address inequity. suggest that community participation in schools can indeed increase accountability. arguing that higher government monitoring is more effective than local community scrutiny in reducing teacher absenteeism and misuse of infrastructure project funds. badly designed. the importance of some of these design and implementation elements was highlighted in the case studies presented earlier. and the level of human development in a region can all influence whether or not communities can benefit from education decentralization efforts. In recent years.

demonstrating that more experience with certain reforms may improve the ability of participates to benefit from them. In a study of the Chicago SBM reform. the benefits of decentralization may still require a certain amount of time and experience before they become evident. Borman et al. and in this period adjustments in design. student attainment recovered by the fifth year. receptivity and participation are common. and 8 years for SBM to actually affect student learning or outcomes. (2003) offer evidence in this regard specifically for school decentralization schemes. Putnam (1993) argues that decentralization should be evaluated not over years. showing that after an initial fall in scores. They examine over 800 SBM designs in the US to posit that it takes 5 years for changes of the reform to be institutionalized. In the years following decentralization. Hess (1999) illustrates this very argument. even if the above prerequisites are present.Of course. 25 of 34 . governments learn by doing. but over decades. Evidence from Mexico (Bando 2010) lends further support to this prerequisite.

Certainly. By contrast. instances when even the presence of these conditions has not resulted in better quality – this suggests that there may be additional factors that are relevant. and time and experience. research from countries such as Mexico has demonstrated that teachers’ unions can have a significant impact on the content and implementation of reforms. There are. Finally. it is important that developing countries follow suit. one important factor that comes immediately to mind is that of the traditional inputs – physical resources such as desks. Even developed nations are now increasingly focusing on training. motivating and professionalizing teachers in order to ensure that those at the frontline are up to the task. as countries deepen their decentralization efforts. however. Mexico.7. the empirical evidence is fortunately larger. Concluding remarks As this paper has shown. more and more scholars also agree that the effects of inputs on learning may be heterogeneous. which often lack basic inputs. the scholarship is too small to draw firm conclusions on specific elements of these two factors. a lot more empirical research and particularly research with a stronger empirical design is required before firmer conclusions than the above can be drawn on the relationship between the two. as well as those between students from different social backgrounds. what specific forms of decentralization work well. Where the former is concerned. The case studies in turn illustrated how at least some of this heterogeneity may be the result of reform design and implementation. In developing countries. As the size of these rigorous evaluations grows. El Salvador and Brazil has shown that devolving even a little authority over personnel matters can facilitate reduced teacher absenteeism. Together. many countries that have decentralized education have also struggled with widening gaps between different geographies. what prerequisites allow decentralization to achieve its potential in enhancing learning. it is important that we do not overlook one of the most critical inputs of all – teachers. Although consensus is growing that inputs alone are not enough to enhance learning. Yet the size and quality of the evidence linking decentralization to improvements in learning is limited. textbooks and flipcharts. capacity building and training. but also those that teach local government officials and community members how teacher performance can best be managed for better results. there may still be a basic level of resources required before governance reforms can be successful. research needs to focus on two areas in particular: first. a continued role for the Centre. Needless to say. Based on the education literature. however. Indonesia. initiatives that can narrow such gaps and thus enhance equity must sit firmly at the top of the post 2015 agenda. and which work less well and second. Brazil. and the Philippines – do nonetheless demonstrate that decentralization has the potential to address quality concerns in developing countries. 26 of 34 . the review indicated that effects may be heterogeneous across countries.such as those from Argentina. In the latter area of prerequisites. Empirical evidence from The Gambia. decentralization in the education arena is a popular reform – by now almost all developing nations have experimented with the reform in one form or another. Thus far it has shown support for community participation. In addition. A handful of more rigorous evaluations . As of now. these factors suggest that a key agenda item post 2015 needs to be initiatives that not only better incorporate teachers into reforms. At this critical juncture for EFA.

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Studies using Randomized Controlled Trials Kenya Duflo et al.24 standard deviations ▪ Increase in Language scores of 0. 20k students from 30 districts over period 2006 to 2007 ▪ No significant association with test scores Difference in differences Almost all secondary schools over period 1994 to 1999 ▪ D associated with higher Math and Spanish scores ▪ Increase of 4. autonomy and training to hire extra teachers and monitor their performance Comparison of treatment and control groups. Studies using Quasi-experimental Techniques or Panel Estimations Argentina Galiani et al. Comparison of treatment and control groups.9% in scores. staff management and budgeting to LG 31 of 34 .9% and 6.1. sub-districts and schools Comparison of treatment and control groups.9. 237 primary schools ▪ No significant association with test scores ▪ 20% reduction in student absenteeism ▪ 23% reduction in teacher absenteeism Madagascar Glewwe and Maiga (2011) SBM Randomized trial in which materials. respectively 2005 3.17 standard deviations ▪ Village linkage and elections associated with increase in test scores of 0. (2008) 1991 LG Decentralized financing. (2011) 2007 SBM Randomized trial which gave school councils a grant. help with school council elections and/or linkages to village council. 21k students from 210 schools SBM associated with ▪ Increase in Mathematics scores of 0. Appendix Table 4: Summary of Selected Evidence on Decentralization and Quality Country Authors Date Type Programme Method of Analysis Sample Results 3.18 standard deviations Indonesia Pradhan et al. 520 schools ▪ No impact of training alone ▪ Village linkage associated with increase in test scores of 0. (2007) 2005 SBM Randomized trial which gave school councils money.22 standard deviations The Gambia Blimpo and Evans (2011) SBM Randomized trial which gave school councils a grant in combination with training Comparison of treatment and control groups.2. training and greater accountability is given to three levels of districts. in combination with training.

000 students from 6.2004 Mexico Bando (2010) 2001 SBM Annual grants of up to USD 15k given to schools/SMCs to improve education quality – PEC Fixed effects on panel data Data from 2001 to 2006 Brazil Paes de Barros and Mendonca (1998) 1982 SBM SBM with three key innovations: ▪ Financial autonomy of schools ▪ Ability to elect principals ▪ Presence of school councils Difference in differences state-level 18 states over period 1981 . SBM associated with ▪ 1.2001 Mexico Skoufias and Shapiro (2006) 2001 SBM Annual grants of up to USD 15k given to schools/SMCs to improve education quality .Table 4: Summary of Selected Evidence on Decentralization and Quality Country Mexico Authors Gertler et al.45 percentage points overall improvement ▪ 1.PEC Difference-in-differences with matching 75000 schools over period 2001 – 2003 Mexico Murnane et al.88 percentage points improvement in Mathematics .24 lower dropout rates ▪ 0. (2010) 2003 SBM Training and direct funding for school improvement Difference in differences with matching 5k schools from 23 districts over 2003 to 2005 32 of 34 Results SBM associated with ▪ Reduction in failure rates by 5.11 percentage points ▪ No impact on failure rates ▪ Five years of participation is associated with increases in Math scores of 0. (2011) Date 1996 Type SBM Programme Small grants to parent councils and parental training targeted at disadvantaged areas – AGE Method of Analysis Difference in differences Sample 30.31 lower repetition rates ▪ Each year of participation resulted in decline in dropout rate of 0.07 standard deviations ▪ Lower repetition rates associated with financial autonomy ▪ Lower mean grade level lag associated with financial autonomy and school councils ▪ Lower proportion of students with lag associated with school council presence.82 percentage points improvement in Science ▪ 1. (2006) 2001 SBM Annual grants of up to USD 15k given to schools/SMCs to improve education quality – PEC Difference in differences Data from 2001 .24 lower failure rates ▪ 0.09 standard deviations ▪ Five years of participation is associated with increases in Spanish scores of 0.32 percentage points improvement in English ▪ 1.1993 Philippines Khattri et al.000 schools over 1997 .4% ▪ Reduction in repetition rates by 4% ▪ No impact on drop-out rates SBM associated with ▪ 0.

(2009) Date Various Type SBM Programme Various Method of Analysis Instrumental variable Sample 17k students from 10 Latam countries . In 1990s.Table 4: Summary of Selected Evidence on Decentralization and Quality Country Crosscountry Authors Gunnarsson et al. greater pedagogical devolution to schools Regression analysis Up to 166 countries with cross-sectional data collected from mid-90s 50 municipalities (out of 355) . tested in 2004 and 2005 ▪ D associated with higher test scores Crosscountry Treisman (2002) Various LG Various Regression analysis ▪ D associated with higher youth illiteracy Chile Di Gropello (2002) Early 1980s LG Some increase in devolved funds to LG. (2011) Various SBM Various Regression with country fixed effects 1mn students from 42 countries . manage school funds and maintain infrastructure Regression analysis with Heckman correction model 605 3rd grade students from 162 municipalities .1997 survey data Results ▪ Autonomy associated with lower test scores ▪ Participation associated with higher test scores Crosscountry Hanushek et al.4 waves of PISA from 2000 to 2009 ▪ Overall negative association between autonomy and scores 3. responsibility for public services Regression analysis using a between effects model Secondary school results from 73 out of 83 regions.3.Student tests conducted in 1996 El Salvador Jimenez and Sawada (1999) SBM Community schools where SMCs can hire/ fire teachers. Studies using Cross-sectional Data Regression Analysis Russia Freinkman and Plekhanov (2009) Phased beginning in 1994 LG Increased fiscal powers with rulebased transfers.data from 1996 ▪ No association with Math or English test scores ▪ Students in EDUCO schools have lower absenteeism 1991 33 of 34 ▪ Municipal financial autonomy not significant ▪ Municipal training spend and wage incentives positively associated with test scores ▪ School involvement in financial decision-making positively associated with test scores ▪ School pedagogical and curricular autonomy positively associated with test scores . greater responsibility for public services.

no association with Language Nicaragua Parker (2005) 1991 SBM Autonomous schools with SMCs that can hire/ fire teachers. manage school funds and maintain infrastructure Matching 3000 students from primary and secondary schools over period 1995 – 1997 ▪ No impact of de jure Autonomy ▪ Positive association of de facto Autonomy with Math and Spanish. manage school funds and maintain infrastructure Matching 1000 3rd and 6th grade students .data from 1996 Results ▪ No association with scores ▪ Lower teacher absenteeism in EDUCO schools Nicaragua King and Ozler (2000) 1991 SBM Autonomous schools with SMCs that can hire/ fire teachers. manage school funds and maintain infrastructure Method of Analysis Matching Sample 605 3rd grade students from 162 municipalities .Table 4: Summary of Selected Evidence on Decentralization and Quality Country El Salvador Authors Sawada and Ragatz (2005) Date 1991 Type SBM Programme Community schools where SMCs can hire/ fire teachers. Regression analysis 24000 6th and 7th grade students from urban schools SBM associated with ▪ Higher Math but no change in Language scores ▪ Effect is stronger for poorer households 34 of 34 . manage school funds and maintain infrastructure Regression analysis with Heckman correction model 200 rural schools tested in 2002 and 2003 SBM associated with ▪ Higher science scores but with no change in Math or Language test scores ▪ Marginally lower dropout rates Argentina Eskeland and Filmer (2007) 1978 SBM Schools choose textbooks and teaching methods.tested in 2002 SBM associated with ▪ Higher third grade Math scores ▪ Lower sixth grade Math scores ▪ No association with Spanish scores Honduras Di Gropello and Marshall (2005) 1999 SBM Community schools where SMCs can hire/ fire teachers.