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Analyzing the Distributional Impact of Reforms, adverse macroeconomic conditions and the leaner public funds follow. ing the debt crisis have encouraged a more efficient use of scarce public. resources Finally in recent years a number of initiatives put forward by the. international community have made education a priority on the develop. ment agenda Through the World Conference on Education for All held in. Jomtien Thailand at the beginning of the 1990s and more recently the. internationally agreed Millennium Development Goals the international. community has reaffirmed its commitment to universal primary education. This chapter provides a brief review of experiences with some of. these reforms In particular it draws on country case studies and recent. findings from the empirical literature on education policy to identify. some of the poverty and social impacts of education reforms the princi. pal transmission channels through which stakeholders are affected by or. affect the reforms and the standard tools for poverty and social impact. analysis in education, While education policy reforms have long term effects on poverty. and income distribution this chapter mainly discusses the distributional. consequences of reforms in the short and medium run Much of the doc. umented impact of education reforms concerns the immediate distribu. tional effects of the reforms rather than the effects of the reforms on the. current poverty status of individuals or households Whenever appropri. ate however we draw out potential immediate effects of reforms on. poverty We adopt a broad view of distributional consequences allowing. for the possibility that reforms redistribute resources as well as access. quality power and authority, This chapter is organized as follows The first section provides an. overview of reforms that have been carried out in the education sector and. the rationale for these reforms The effects of reforms on distribution are. then reviewed and an analytical scheme for understanding these distrib. utional effects is presented highlighting how the reforms vary mention. ing specific features of each reform and documenting the transmission. channels through which stakeholder groups are affected A survey of. empirical tools for both qualitative and quantitative poverty and social. impact analyses is provided and valuable empirical studies on each tool. are singled out Finally the options for monitoring and evaluation are. briefly discussed,TYPES OF REFORM, There are several broad changes to education policy that are covered in this. chapter In general these reforms concern policy changes to the expendi. Education Policy Reforms, ture structure the financing scheme and management although there.
may be significant overlap among these broad categories We exclude from. these categories a number of professional and management reforms such. as curriculum reform2 or teacher training3 that do not have explicit doc. umented impact on distribution We also exclude financing schemes that. are less common in developing countries such as student loans. Expenditure reform A government may choose to restructure its expen. ditures to reallocate spending from higher education to lower levels of. education Reforms aimed at increasing the supply of schooling may. focus on targeted spending or the expansion of coverage in specific. geographic areas through a mix of public and private sector support. including public support for private education in low income areas. Financing reform A government may choose to reform the financing of. education by introducing user fees cost recovery or as seen in a num. ber of developing countries in recent years by eliminating them A. related scheme is the introduction of community financing whereby. for example communities are entirely responsible for the construction. and maintenance of buildings Financing schemes may include schemes. on the demand side in which funds are channeled directly toward. people who demand education rather than people who supply it to. strengthen the client s power over providers Demand side financing. schemes may involve transfers to households vouchers or payments. given directly to students who may submit them to the schools of their. Management and institutional reforms A country in which there is cen. tralized management over the education system may choose to imple. ment management reforms by decentralizing the administration of. education This may involve a shift in responsibility from the central gov. ernment to local governments communities or schools The shift might. include a simple delegation of tasks from the central government to local. governments or a complete transfer of authority and decision making. power The changes may be viewed not simply as administrative adjust. ments but as reforms that fundamentally alter relationships of account. ability and the way in which services are provided The classification of. these changes as institutional reforms may then be appropriate. There are of course alternative methods for classifying this family of. education policy reforms For example one might contemplate a con. ceptual division between compensatory schemes or targeted policies that. aim to increase educational opportunities for the poor and schemes or. Analyzing the Distributional Impact of Reforms, policies that are universal in coverage The reforms that have been imple. mented over the last decade may be broadly classified as those that are. primarily aimed at expanding access expanding supply restructuring. expenditure abolishing fees and those that are primarily aimed at. improving quality efficiency and sustainability decentralization com. munity management vouchers, Reimers 2000 suggests that it may be useful to think about educa. tion in terms of levels of educational opportunities ranging from initial. access to schooling through progression and completion to assimilation. into local labor markets Following this typology one could then under. stand education reforms as specific interventions aimed at selected levels. of educational opportunity, These alternative typologies however also allow for overlap among. categories There are measures such as the provision of textbooks that. blur the distinction between access quantity and quality Poor children. have been observed to drop out of school with greater frequency for exam. ple partly because the quality of schooling is low Programs exist that are. broad in scope offering for example greater financing for primary edu. cation but strategically directed at increasing the educational opportuni. ties available to the poor who may account for a disproportionate share. of enrollment in public primary schools,RATIONALE FOR UNDERTAKING REFORM. In an environment characterized by low education attainment and in. equitable access to education developing countries have typically imple. mented education policy reform to improve access to education in general. and also to expand coverage among poorer households Such is the ration. ale for significant additions to budgets for primary education construction. programs and many compensatory programs targeted at the poor. Efficiency considerations are also important A substantial body of lit. erature has emerged over the last three decades on the rate of return to edu. cation While the methodology has come under scrutiny there is general. consensus that the returns to primary schooling are high thus suggesting. that spending could be switched from higher to lower education levels. Some reforms are designed to improve public finances Cost recovery. schemes for example are designed to supplement government revenues. when rapid education expansion has created significant pressure on the. budget The resources raised may also be used to improve quality and boost. demand for education In fact some advocates of user fees with waiver. schemes built into certain proposals have supported the institution of cost. Education Policy Reforms, recovery on the grounds that such a scheme may improve quality and.
increase demand without significantly raising cost barriers Meanwhile. some reforms such as voucher schemes aim to create a market oriented. environment that encourages competition between public and private. schools enhances school quality reduces costs and adds to the choices. available to students Vouchers are also designed to allow students access to. higher quality private education, Management and institutional reforms such as decentralization. programs are designed to improve efficiency accountability and respon. siveness in education service provision These reforms follow from the. assumption that centralized systems often are not able to respond effi. ciently and adequately to local needs Decentralization reforms are meant. to encourage local participation and ultimately improve coverage and. quality Sosale 2000 has suggested that the strengthening of the private. sector role in noncompulsory education is also aimed at releasing public. resources for allocation to the compulsory basic education level. Finally political pressures from within and outside a country have. profound effects on educational policies such as Free Primary Education. or Education for All The call for Education for All and for measures to. meet the Millennium Development Goals in the international commu. nity has been particularly influential The enhanced Heavily Indebted. Poor Countries Initiative has also led to a reallocation of public resources. toward the social sectors,TYPICAL RANGE OF EFFECTS ON DISTRIBUTION. Figure 6 1 summarizes the analytical scheme of this chapter It indicates that. the broader development strategy determines the reform options Through. their impact on prices income employment and wages education policy. reforms redistribute resources access to education and the quality of the. services provided They also redistribute authority and the relationships of. accountability These resources and services are all redistributed among. individuals immediately as well as over time They are redistributed both. across and within households communities and government units 4. Immediate effects on the distribution of access to and. quality of services, First education policy reforms have immediate short term effects on the. distribution of access to education services and the quality of these serv. ices For example reforms aimed at expanding the supply of education. Analyzing the Distributional Impact of Reforms, FIGURE 6 1 Analytic Scheme Education Policy Reform. Development Strategy,Education Policy Reform, Impact on relative prices of goods and services access income expenditure employment and.
Short term impact on the distribution of access to education services quality power and authority. Medium term impact on the distribution of access to services and quality. Long term impact on the distribution of employment prospects and wages. Individuals Households Communities Government Units. Source Author, by expenditure restructuring or targeted interventions may increase. enrollment Because these are targeted interventions and because these. reforms are usually designed to increase the supply of basic education. typically assumed to have pro poor benefit incidence rather than higher. education typically assumed to be less pro poor such measures may. disproportionately benefit the poor 5 The value of these education sub. sidies could be significant Reforms designed to change the financing of. education may boost enrollment among the poor by easing some of the. financing constraints on the poor for example the elimination of user. fees improving access to higher quality schools for example through. vouchers or enhancing the quality of schooling Other reforms run the. risk of reducing enrollment particularly among households with lower. incomes for example the introduction or raising of user fees 6. Meanwhile geographic variations in quality may be intensified by. rapid expansions in the supply of education because these require a. capacity to absorb the expansions Rural schools for example tend to. have fewer qualified teachers They may not have the same ability as their. urban counterparts to quickly accommodate sudden surges in enroll. ment Under some circumstances management reform or decentraliza. tion may widen disparities in the quality of education to the extent that. geographic differences in the availability of resources exist Similar dis. tributional consequences may follow from other reforms that lead to. Education Policy Reforms, greater community participation such as community financing In gen. eral richer communities are in a better position to provide resources for. education However some initiatives relying on community solidarity are. considered more difficult to undertake in urban areas. Even if the coverage of education among the poor was expanded. however it would be important to assess the distributional dimensions of. marginal changes in access within the poor households themselves With. respect to the demand for education the price elasticity of households may. vary by gender That is as their financing constraints fall households may. be more likely to enroll boys rather than girls With respect to expanded. choice higher income households may have greater access to information. and thus be in a better position to exploit voucher schemes fully Carnoy. 1997 Households in urban areas may also enjoy advantages such as a. wider choice among higher quality schools not otherwise available to their. rural counterparts,Dynamic effects on the distribution of income and. access to and quality of services, Second reforms in education have important dynamic effects on distri. bution In the long run the expansion of education is generally designed. to improve intergenerational employment opportunities and alleviate. poverty Other things being held constant greater human capital accu. mulation improves income generating capacity To the extent that reforms. are targeted at improving the human capital of the poor reforms have. long term progressive effects on the distribution of income In fact even. if public spending on poor and rich were increased uniformly it is likely. that the marginal impact of each unit of spending on the human capital. of the poor would be higher Because aggregate human capital accumula. tion has positive effects on long term growth education reforms that. expand the supply of education have long term second round effects on. poverty reduction, Still the rates of return to levels of education change as the supply of.
specific levels of education expands A number of studies have shown for. example that returns to primary education fall while returns to higher. education rise as a country rapidly expands access to primary education 7. In particular global surveys of the returns to schooling consistently reveal. a pattern of falling returns to education by level of economic development. and level of education, In the medium term there are important but often neglected. second round effects that may mitigate or exacerbate first round gains in. Analyzing the Distributional Impact of Reforms, access In the case of rapid increases in enrollment the quality of school. ing may subsequently fall Should expansion lead to the rationing of lim. ited class space poorer households are typically worse off than wealthier. ones Enrollment rates across households may drop following some dete. rioration in quality in situations in which the demand for education is. systematically linked to quality Within households this may have gender. dimensions as well as enrollments among girls may be the first to decline. The deterioration in quality may have distributional dimensions as insti. tutional capacity varies across geographic units Urban schools for exam. ple may be in a better position to deploy qualified teachers quickly to. accommodate rapid increases in enrollment In the case of school vouch. ers children from lower income households may be penalized through. cream skimming as better students usually those from richer house. holds leave the schools that are accepting vouchers to attend higher. quality schools because there may be spillover benefits from peer effects. Thus while voucher systems may create incentives that lead to better per. formance among public schools the loss of the better students to private. schools may lead to an overall decline in public school performance. Hsieh and Urquiola 2003,Effect on the distribution of power and authority. Third reforms redistribute power and authority In general reforms re. distribute resources in the form of transfers opportunities or the qual. ity of education However another dimension of education policy reform. is represented by the manner in which power and authority through. budgets decision making powers and rights are redistributed Grindle. 2001 In the case of institutional or management reforms authority may. be transferred from a central unit to local units Relationships of account. ability such as between schools and local communities among teachers. administrations and parents and between government and the private. sector may also evolve with education reforms,RANGE OF VARIATIONS IN REFORM OPTIONS. There is wide variation in the options for policy changes in this family of. reforms The distributional consequences of these reforms how quickly. institutions and individuals adapt and whether sufficient capacity is in. place depend on these many variations Reimers 2000 suggests that. much policy is defined and often recreated at the implementation stage. Education Policy Reforms,Expenditure reform, With expenditure restructuring spending may be reallocated from one.
education level to another central funds may be reoriented toward spe. cific geographic units or households or the norms for budgeting may. have built in explicit pro poor components, In South Africa public resources are provided to schools sorted by need. or poverty The ranking is based on two equally weighted factors the. physical condition of the school and the relative poverty of the school. In Chile the P 900 program provides direct material assistance to the. most poorly achieving schools These schools numbering about 900. hence the name are selected based on whether their mean test scores. have dropped below cutoff values 8, In countries where gender gaps in schooling are significant spending. may be reallocated specifically to promote schooling among girls Such. reforms include the construction of separate schools for girls the pro. vision of sanitation facilities or the hiring of more women teachers. For example the construction of separate latrines for girls in Pakistan. reportedly had positive effects on the enrollment of girls in primary. schools World Bank 2003,Financing reform, With respect to cost recovery schemes countries may choose to mitigate. the regressive impact of user fees by offering targeted scholarships Coun. tries that have eliminated user fees have opted at one extreme for a big. bang approach Malawi in the early 1990s while others have taken on. a more gradual reform such as the elimination of fees one grade at a time. Lesotho in recent years In the 1970s Nigeria implemented free primary. schooling one state at a time Some countries have eliminated formal fees. for uniforms textbooks and examinations while encouraging local com. munities to contribute to funds for construction and renovation. A range of voucher programs also exists from quasi voucher initia. tives for example Bangladesh C te d Ivoire and the Czech Republic. to true voucher programs for example Chile and Colombia Even in. countries with true voucher programs there are some important varia. tions The voucher plan in Colombia for example was restricted to very. low income pupils, Gauri and Vawda 2003 provided a survey of voucher programs in. developing and transition economies In Bangladesh state subsidies for. Analyzing the Distributional Impact of Reforms, nongovernment schools function as a sort of voucher When schools.
attract enough students and the hiring of an additional teacher is war. ranted the government pays for most of the extra teacher s salary In. the Czech Republic private schools receive state funding equal to just. below 80 percent of the per student funding received by their public. counterparts,Management or institutional reform, Decentralization programs may involve a simple transfer of administrative. tasks deconcentration or a full transfer of authority from central units. to local units devolution They may likewise involve transfers of respon. sibility from the central government to subnational governments or trans. fers of responsibility from central units to communities and schools The. financing schemes include centralized systems with the formula based allo. cation of expenditures to schools according to the number of teachers the. number of students or some other criteria and systems that require a sig. nificant degree of community cofinancing, In Nicaragua for example there was a shift from a highly centralized. system in the 1980s to a more decentralized system beginning in 1993. School boards composed of parents teachers and student representa. tives were created and given important decision making powers includ. ing hiring and firing decisions over school principals and teachers. budget allocation decisions and the authority to make adjustments to. the national curriculum Belli 2004, In Bhutan according to official guidelines local communities are held. responsible for the construction and maintenance of buildings includ. ing teachers quarters Bray 1996 In theory teachers wages are cen. trally financed but some communities employ their own teachers to. compensate for the shortage of government employed teachers. PRINCIPAL TRANSMISSION CHANNELS THROUGH WHICH,STAKEHOLDER GROUPS ARE AFFECTED. There are several transmission channels through which stakeholders are. affected by reforms as depicted in Figure 6 1 There may be some over. lap among channels Relative price changes for example alter household. expenditures and access to goods and services It is possible that a specific. policy reform may alter these channels For clarity however we discuss. each channel separately,Education Policy Reforms, The relative prices of goods and services will change.
Education policy reforms have significant effects on the relative prices of. education goods and services For example cost recovery schemes elevate. the price of education services Consequently these schemes may have. regressive effects on distribution unless mitigation provisos such as schol. arships are in place In contrast the elimination of user fees lowers the out. of pocket expenditures of households for education services The available. evidence suggests that enrollments have risen rapidly following the aboli. tion of fees Similar effects have been observed following interventions. explicitly designed to raise the supply of education with especially sharp. increases among poorer households 9, Other reforms have important auxiliary effects on the prices of goods. and services Private schools for example have been known to raise fees. following the introduction of vouchers effectively restricting access to that. of richer households Carnoy 1997 Meanwhile management reforms. may have important effects on relative prices For example community. management may be seen as a tax on the time of a local community and. is arguably regressive In El Salvador the contribution of parents to the. Education with Community Participation Program Educaci n con Par. ticipaci n de la Comunidad EDUCO the decentralization program. aimed at expanding the supply of education in rural areas has been esti. mated roughly as equal to 28 percent of the work done by the Ministry of. Education Cu llar Marchelli 2003 Among households there may also. be regressive effects as relatively greater effort may be required of poorer. households compared with richer households to reach the same outcome. An evaluation of El Salvador s experience with community managed. schools suggests that the poorest children can obtain education results. equivalent to those obtained by their richer counterparts only if their par. ents are prepared to work harder Reimers 1997,Household incomes and expenditures will change. The policy debates on the social impact of reforms have generally revolved. around the issue of access and the way reforms such as the institution. of cost recovery create financing barriers to education for households. Whether or not such barriers actually lower access to education they cer. tainly increase out of pocket expenditures or decrease net income if user. fees are counted as taxes on education across all households For the. poorest households this may have long term adverse effects on welfare. There is evidence that user fees as typically implemented consume a dis. Analyzing the Distributional Impact of Reforms, proportionate share of the incomes of the poorest households Reddy and. Vandemoortele 1996 30,Access to goods and services will change. The changes in the relative prices of goods and services alter the access of. households to education see the section titled The relative prices of goods. and services will change Meanwhile vouchers are designed to provide. greater access to higher quality education services and construction pro. grams have direct effects on the access of specific communities to educa. tion Clearly access to educational services is determined by many factors. other than prices Thus reforms that reduce nonfinancial barriers to edu. cation such as teacher training reforms or bilingual education initiatives. promote education without changing nominal prices or nominal house. hold incomes and expenditures,The quality of goods and services will change.
Should the elimination of user fees weaken the fiscal stance the quality of. the goods and services provided may deteriorate Experiences with initia. tives in support of Education for All or Universal Primary Education indi. cate that access shock has usually followed the abolition of fees Across a. number of countries the quality of schooling measured in terms of pupil. teacher ratios textbook per pupil ratios the share of qualified teachers. has deteriorated following increases in enrollment Yet the quality of serv. ices is not exclusively a function of fiscal resources Given the same amount. of educational resources management reforms may improve the quality of. the services provided, Human capital assets and employment prospects will change. Reforms aimed at raising access to education promote human capital for. mation This increases the long term employment prospects for those. people who benefit from the expanded education opportunities However. some educated workers may see the value of their education fall as the pool. of educated workers grows Knight and Sabot 1983 A recent country. study by Duflo 2002 of education expansion in Indonesia through a sig. nificant program of school construction initiated in the 1970s the Seko. lah Dasar Instruksi Presiden INPRES Program found that an increase. in the proportion of primary school graduates in the labor force decreased. the wages of older cohorts 10 All told the greater supply of education both. Education Policy Reforms, boosts average incomes by improving the employment prospects of the. newly educated workforce and reduces inequality by bidding down the. wages of the richer higher educated workforce, TYPICAL DIRECTION AND MAGNITUDE OF THE IMPACTS AND. EVOLUTION OVER TIME,Expenditure reform, An expansion of supply achieved through expenditure restructuring tar. geted spending or school construction programs immediately promotes. greater access especially among poorer households Over time sharp. rises in enrollment may lead to some deterioration in quality Moreover. an expansion of supply at the lower levels of education may have little. long term impact if it is not matched by an expansion of supply at the. higher levels of education and in the prospects for employment There is. evidence that households are forward looking and take into account the. constraints on access to higher education when making decisions at the. primary level for example see Lavy 1996,Financing reform.
Cost recovery schemes may have important dynamic effects depending on. whether fees are being introduced reduced or eliminated The introduc. tion of user fees has an immediate impact on households out of pocket. payments if the impact is large enough this may lessen the demand for. schooling However greater resources may improve the quality of the serv. ices provided For example some schools have been known to use the. proceeds from cost recovery for investment over time in quality for the. case of Mali see World Bank 2003 These investments in quality may in. turn increase the demand for education see Kremer 1995 The revenues. collected through cost recovery schemes may also finance education expan. sion directly, In contrast the abolition of user fees lowers the out of pocket pay. ments of households see the section titled The relative prices of goods and. services will change This promotes greater access to education especially. among the poor In the medium term if school facilities do not keep up. with the rising demand there may be deterioration in quality because of. crowding 11 If higher enrollments cannot be accommodated rationing may. take place Changes in quality and rationing may each lead to reduced. access increased dropout rates and more repetition and poorer house. Analyzing the Distributional Impact of Reforms, holds are particularly vulnerable in these cases A voluminous body of lit. erature some of which dates back to the 1970s shows that rapid increases. in enrollment following the abolition of fees have often been accompanied. by deteriorations in quality see Table 6 1 at times with significant geo. graphic variation Enrollments have sometimes decreased over time partly. because of declines in quality, The elimination of fees reduces teacher accountability with respect to. parents Kadzamira and Rose 2003 Of course this would be true only if. the payment of the fees has been accompanied by greater accountability. with respect to parents Some fees may be reinstated in the absence of fis. cal countermeasures potentially reducing enrollment among the poor. Such was the case of Kenya in the 1970s Nkinyangi 1982 Other countries. have taken steps to finance expenditures that were previously financed by. the fee revenues For example in the 1990s Uganda added to the recurrent. budget for education to compensate for the abolition of fees. The introduction of school vouchers has several immediate effects. First vouchers promote access to higher quality private schools and thus. lead to rapid growth in private school enrollments Second when the value. of the voucher is insufficient or not automatically adjusted to inflation. households may face higher out of pocket payments Gauri and Vawda. 2003 Compared with richer households poorer households may not. make up for the shortfall in spending and are therefore less likely to use the. vouchers for private schools Third assuming the value of the voucher is. adjusted sufficiently to inflation the vouchers may still benefit only select. income groups There is evidence that parents at a lower level of education. attainment are less likely to conduct research and make school choices on. the basis of quality Moreover the better private schools tend to be located. in the urban areas where the more affluent families live Finally the expe. rience in Chile suggests that the best voucher schools charge higher tuition. copayments effectively restricting the access of the poor anyway. Over time vouchers may foster competition between private and. public schools assuming there are no capacity constraints on improv. ing the quality of education such as the external constraints in C te. d Ivoire Public schools facing greater competition from their private. counterparts could make efforts to reduce costs and enhance quality. West 1997 12 Cream skimming may also occur as public schools lose. their best performing students to private schools see the section titled. Dynamic effects on the distribution of income and access to and qual. ity of services If there are important peer effects because of the pres. ence of more advanced students in greater numbers in classrooms. vouchers may foster rises in inequality in achievement if the advanced. T A B L E 6 1 What Happens When Primary School Fees Are Eliminated The Main Results of Selected Country Studiesa. Year s Author year Measurement, Country covered of publication Analysis Enrollment Quality of quality Comment. Botswana 1973 1980 Mehrotra 1998 Descriptive Increased Not indicated Not indicated Primary school fees were halved. in 1973 and were removed,entirely in 1980, India 1977 92 Duraisamy Multivariate Increased Deteriorated Pupil teacher ratio None.
Tamil Nadu et al 1997 pass rates, Indonesia 1977 78 Colletta and Descriptive Increased Not indicated Not indicated Embarked on its program with a. Sutton 1989 pool of available teachers, Kenya 1970 78 Nkinyangi 1982 Descriptive Increased Not indicated Not indicated In the absence of fiscal counter. measures new fees were,imposed under new names, Kenya 1974 85 Colletta and Descriptive Increased Deteriorated Not indicated Low quality particularly acute in. Sutton 1989 poorer districts, Madagascar 2002 Fafchamps and Multivariate Increased Not indicated Not indicated None. Minten 2003, Malawi 1994 97 MacJessie Descriptive Increased Deteriorated Pupil teacher ratio Families and communities still.
Mbewe 2002 textbook repetition involved in cost sharing. Malawi 1994 97 Kadzamira and Descriptive Increased Deteriorated Pupil per qualified None. Rose 2001 2003 teacher textbooks, Malawi 1990 98 Al Samarrai and Benefit Increased Not indicated Not indicated Gains in enrollment have been. Zaman 2002 incidence highest among the poor,Education Policy Reforms.

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