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Expenditure Management

How governments manage their expenditure and evaluate whether financial management has been efficient, effective and equitable are important aspects of financing education. This section provides selected readings on public expenditure management issues and policy choices.


Al-Samarrai, Samer. 2003. Financing Primary Education for All: Public Expenditure and Education Outcomes in Africa. Brighton, Institute of Development Studies, University of Sussex.

This report presents the main findings of a research project that explored the relationship between public education spending and education outcomes at the primary school level in developing countries. The report explores this relationship from a cross-country perspective before concentrating on three African case studies – Botswana, Malawi and Uganda. These case studies provide important insights into how universal primary education has been achieved from a financing perspective and practical lessons for other African countries attempting to achieve primary education for all. The research finds that the link between resources and education outcomes are weak and that the achievement of the MDGs and EFA targets will require more than just increases in expenditure on primary education. This is not meant to imply that increased resources are unnecessary, merely that they are unlikely to be sufficient for achieving the education goals. The composition of resources and institutions that govern the use of these resources plays a central role in translating resources into better schooling outcomes. The report demonstrates that improving the public expenditure management system is also important in strengthening the link between public spending and education outcomes. Furthermore, the report has shown that recent successes in improving access to primary education have predominantly been a demand-side phenomenon and improvements in education outcomes will only be sustainable if demand-side constraints to primary schooling are tackled. A stronger focus on these aspects of education systems will be required if the MDGs in education are to be achieved. (Abstract in the Report)



Boyle, Siobhan., Brock, Andy., Mace, John. and Sibbons, Mo. 2002. Reaching the Poor: The ‘Costs’ of Sending Children to School - a Six Country Comparative Study- Synthesis Report. London, DFID.

This comparative research study focuses on the main barriers to education for the poorest households in Bangladesh, Nepal, Sri Lanka, Kenya, Uganda and Zambia. Although the study set out primarily to look at the burden of education costs on the poorest households very rich data on other barriers to education (e.g. physical access, quality of education, vulnerability/poverty, and health,) have been gathered and are discussed. The study looks at what motivates parents to send their children to school (and keep them there) through their perceptions of the quality and value of education. Illuminating views concerning the barriers, the quality and value of education from out of school children and children in school are also presented. (Abstract in the publication)



Bray, Mark. 2002. The Costs and Financing of Education: Trends and Policy Implications. Manila, Asian Development Bank and Comparative Education Research Centre, The University of Hong Kong.

This booklet is one of a series of five that focus on education in the developing member countries (DMCs) of the Asian Development Bank (ADB). The other four booklets focus on education policy, management and administration, quality, and equity and access. Like the other booklets, this one is primarily concerned with formal kindergarten, school, technical/vocational, and higher education systems. The work is concerned not only with government financing of education but also with various forms of private, household, and community financing. All societies confront basic questions about the scale, nature, and balance of education financing. They must decide on the volume of resources to allocate to education activities; identify ways to generate those resources; and consider methods to maximize cost-effectiveness in education investment. Because these basic challenges confront all societies, they provide a thread of commonality throughout the region and throughout the booklet. At the same time, the emphases of particular questions, and the natures of the answers, vary substantially within the region. These variations provide instructive contrasts which help identify contours which might otherwise go unnoticed. Comparative analysis also provides a set of experiences from which others can identify both models that might be desirable to emulate and mistakes that should be avoided. The study begins by presenting some background information on the countries on which the analysis particularly focuses, on groups of countries, and on the Asian and Pacific region as a whole. It then turns to the scale of education and the volume of expenditures, noting the balance between government and nongovernment inputs, and commenting on changes over time. The next section turns to matters of unit costs and their determinants. It presents information on differences between and within levels of education, and discusses the policy implications of these differences. This is followed by a summary of the debate on the respective roles of government and private sectors in the education sector. In turn, this discussion leads to commentary on trends in cost sharing and revenue generation at the system and institutional levels. The following section notes the scale and orientation of external aid for education in some countries. The penultimate part looks at different strategies for different groups of countries, while the last section summarizes and concludes. (Summary of Introduction)



Dehn, Jan., Reinikka, Ritva. and Svensson, Jakob. 2003. Survey Tools for Assessing Performance in Service Delivery. Da Silva, Luiz A. Pereira. and Bourguignon, François. (eds.), The Impact of Economic Policies on Poverty and Income Distribution: Evaluation Techniques and Tools. World Bank and Oxford University Press, pp. 191-212.

It has become increasingly clear that budget allocations, when used as indicators of the supply of public services, are poor predictors of the actual quantity and quality of public services, especially in countries with poor accountability and weak institutions. This chapter argues that microeconomic-level survey tools are useful not only at the household or enterprise level but also at the service provider level to assess the efficiency of public spending and the quality and quantity of services. The two microlevel surveys discussed here, the public expenditure tracking survey (PETS) and the quantitative service delivery survey (QSDS), both obtain policy-relevant information on the agent (say, a district education office) and the principal (say, the ministry of finance or a parent-teacher association). Similarly, repeat PETSs or QSDSs can be used as tools to evaluate the impact of policy changes. (Summary of introduction) 



Di Gropello, Emanuela. (ed.). 2006. Meeting the Challenges of Secondary Education in Latin America and East Asia: Improving Efficiency and Resource Mobilization. Washington, DC, World Bank.

In a context of increased primary school enrollment rates, secondary education is appearing as the next big challenge for Latin American and East Asian countries. This report seeks to undertake a detailed diagnostic of secondary education in these two regions, understand some of the main constraints to the expansion and improvement of secondary education, and suggest policy options to address these constraints, with focus on policies that improve the mobilization and use of resources. (Abstract in the World Bank website.)[Download]



Gauthier, Bernard. 2006. PETS-QSDS in Sub-Saharan Africa: A Stocktaking Study. Washington, DC, World Bank.

The delivery and access of basic services to the poor, particularly health, education, water and sanitation, is at the heart of the development agenda. Indeed, most donors, in the framework of the Millennium Development Goals and the Africa Action Plan, have promoted increased government budgetary allocations in health and education sectors to reach the poor. While such approach is certainly necessary, it is however not sufficient to ensure improvement in service delivery performance. Public service provision could be affected by institutional inefficiencies such as leakage of public resources, weak institutional capacity and inadequate incentives. Indeed, even if spending is officially allocated to services that target the poor, funds may not necessarily reach frontline service providers, and effectiveness of services may consequently be affected by poor incentives, absenteeism, and poor quality. Two types of service provider surveys, Public Expenditure Tracking Survey (PETS) and Quantitative Service Delivery Survey (QSDS), have been implemented in the last ten years in about two dozen developing countries to address questions of efficiency and equity of public expenditures and service delivery. This study examines PETS and QSDS carried out in Africa with the objective of assessing their approaches, main findings and contributions. It seeks to identify a common framework in order to increase compatibility among tracking surveys and to propose potential future surveys and follow-up work. (From the Introduction)



Institute Apoyo. 2002. Public Expenditure Tracking Survey: The Education Sector in Peru.

In recent years, Peru has made significant advances towards strengthening the administration of public resources. The law of fiscal transparency has established annual goals for fiscal aggregates and an allocation system for inter and intra sector resources as well as protected and targeted budget assignments for social programs. These efforts have been accompanied by the implementation of a modern system of integrated financial administration. The results, however, are still modest. It is well known that the resources centrally assigned to education (schools), health (health posts) and nutritional programs, among others, confront considerable problems (delays and leaks) while reaching their final destinations, particularly when the destinations are outside of Lima or in rural remote areas. However, the Government of Peru has not made any attempts to evaluate the quality, efficiency, and efficacy of public expenditure at this level. It is within this context that the Government of Peru, with the assistance of the World Bank and the Inter-American Development Bank, is supporting a revision of its social spending. To aid in this effort, Public Expenditure Tracking Surveys (PETS) were adopted as the instrument of choice to aid in the detection, analysis and quantification of the weaknesses of the budget execution system, on the effects of these weaknesses on service delivery, and to assist in the generation of policy recommendations. (From the Introduction)



Levacic, Rosalind. and Downes, Peter. 2004. Formula Funding of Schools, Decentralization and Corruption: a Comparative Analysis. Paris, IIEP.

This book looks at the relationships between decentralization of funding for schools and the prevalence of corruption, a crucial concern for education policymakers today. The monograph is based on the assumption that formula funding acts to reduce the likelihood of fraud, as one of its essential elements is public accessibility to information. Transparency puts pressure on those in positions of responsibility to conform to regulations, since the chance of detection is much higher and the consequences of misappropriation are greater. The authors examine four countries at different stages of decentralization of school finance and management. Based on the range of evidence provided, they produce a number of recommendations for policymakers, including: training of principals and administrative staff; a greater understanding of the mode of operation of the formula; preparation of manuals for financial procedures; empowerment of stake holders; local monitoring; standardization of account formats; external checks; ensuring the independence of auditors; and the implementation of remedial actions when deficiencies are detected. (From the back cover) 



Lewin, Keith. and Caillods, Francoise. 2001. Financing Secondary Education in Developing Countries: Strategies for Sustainable Growth. Paris, UNESCO/IIEP.

In 1990, at the World Conference on Education for All in Jomtien, and again in April 2000 in Dakar, most developing countries reaffirmed their commitment to providing their school-age children with universal access to a first cycle of education. Little attention has been paid to the consequences of enrolment expansion at primary level on future educational demand above that level. Yet the number of children who graduate from primary education is expanding rapidly and putting pressure on governments to open up educational opportunities at higher levels. With present cost structures, however, a number of countries will find expansion of secondary education unsustainable. This book explores the problems and issues that surround secondary school financing. It outlines the rational for expanding secondary education and investigates under what conditions it might be possible to do so at sustainable levels of cost. It carries out the analysis for different groups of countries, using data derived from the UNESCO database. It then analyzes the issue on the basis of case studies in Asia, Latin America and Africa. It concludes with a discussion of the policy options that offer prospects of improved access at sustainable levels of cost without unacceptable deterioration in quality. (From the back cover)



Miller, Kirsten. 2002. Policy Brief: Resource Allocation: Targeting Funding for Maximum Impact. Colorado, Mid-continent Research for Education and Learning (McREL).

The American debate over education reform is tremendously complex. One key question is the extent to which student performance gains are linked to education resources. Over the years, some researchers have questioned whether additional education resources impact student achievement - essentially, whether money matters. As more states undertake systemic reform, policymakers and administrators are likely to face hard choices about resource allocation. One thing, at least, is clear: Educating children costs money. But just how much money is needed, and how can policymakers and administrators maximize the use of resources to increase student achievement? The purpose of this policy brief is to examine the connections between student achievement and resource allocation and to provide policymakers with guidance in the area of resource allocation. Although overall spending levels are an important component of this discussion, the key may not be simply to spend more - but rather, to spend available resources more wisely. (From the introduction) 



Ogawa, Keiichi. 2004. Public Expenditure on Education and Resource Management: Case of Zambia. Journal of International Cooperation in Education, Vol. 7, No. 1, pp. 133-143.

This paper examines how Zambia allocates public resources. The paper is divided into two parts: first it examines the extent to which public resources for education are used efficiently, particularly as a linkage with educational outputs, in comparison to other sub-Saharan African countries; secondly, the study investigates the degree to which public resources are distributed efficiently and equitably by evaluating teacher allocation. The paper concludes that compared to other sub-Saharan African countries, the share of public education expenditure in Zambia is smaller even though its public resources are employed more efficiently than other sub-Saharan African countries. However, when examining the allocation of teachers as well, public resources are not used efficiently or equitably. There is a wide disparity of teacher-student ratio at the primary level across the country as well as among and within provinces. The paper recommends that a standardised management approach to re-allocate the resources in teachers should be adopted, which will increase access to schooling as well as to improve student promotion. (Abstract in the eldis website) 



Pan, Diane., Rudo, Zena H., Schneider, Cynthia L. and Smith-Hansen, Lotte. 2003. Examination of Resource Allocation in Education: Connecting Spending to Student Performance. Texas, Southwest Educational Development Laboratory.

This document reports on a study on the relationship between resources and student performance. The study examined district-level patters improve student performance, and barriers and challenges to efficient resource allocation faced by districts and schools. The study took place in independent school districts in Arkansas, Texas, New Mexico, and Louisiana. Data for the study were collected from national, state, and local fiscal, staffing, and demographic records and information; interviews with superintendents, directors of instruction, chief financial officers, personnel directors, principals, and other district staff; focus groups composed of administrators; and teacher surveys. Both qualitative and quantitative data were analyzed using various methods, including multivariate models, ANOVAs, and regression analysis. The findings from the research demonstrated a strong relationship between resources and student success. The results indicated that allocating resources within select areas and for certain practices might make a significant impact o student performance. Both the level of resources and their explicit allocation seemed to affect educational outcomes. Four appendices detail the variables used in the data analyses, data-collection protocols and procedures, analyses of the data, and tables showing fiscal and staffing data. (ERIC Abstract; summary)



Perry, Victoria. 2008. Civil Society Engagement in Education Budgets: A Report Documenting Commonwealth Education Fund Experience. London, Commonwealth Education Fund.

This report documents Commonwealth Education Fund experience, illustrating how civil society can engage in the budget process through budget analysis; tracking disbursement flows through the education system; monitoring expenditure; and lobbying to influence budget allocations to the education sector. This report is primarily intended for groups or individuals that have a new or relatively new interest in education budget work, but may also be of interest to those that have engaged in this work for some time and are interested in Commonwealth Education Fund experience and access to useful resources. The report describes why education budget work is important. It records the range of work supported by the Commonwealth Education Fund and sets this within the international context of budget work. It documents the major achievements and common challenges faced by organisations implementing programmes of budget work and makes recommendations based on the experience of partners supported by the Commonwealth Education Fund. It also provides country profiles, which offer an insight into the experiences of budget work programmes at country level. They document the achievements, activities, challenges and lessons learnt for each of the countries supported by the Commonwealth Education Fund. The final section of the report provides a list of resources – budget expenditure tracking manuals, tools and examples of research on education financing – that were produced with support from the Commonwealth Education Fund. These serve as a useful guide for the reader to investigate budget work and budget issues in more depth. There are also links to organisational websites where further information on budget work may be found. (Abstract in the eldis website) 



Reinikka, Ritva. and Smith, Nathanael. 2004. Public Expenditure Tracking Survey in Education. Paris, IIEP.

The public expenditure tracking survey (PETS) is a method used to study the flow of public funds and other resources, including various levels of government and administrative hierarchy. It is most relevant where public accounting systems function poorly or provide unreliable information. This method has been applied successfully in Uganda, Peru, Zambia and many other countries to enhance our understanding of why public resources devoted to education often produce unsatisfactory results. Education is in most countries financed and provided publicly. Left to itself the market would provide education in a too inequitable manner, leaving too many children without. Yet without some ‘client power’, it is difficult to crate incentives that will make education systems function efficiently. Accountability must be carefully cultivated as administrators and teachers are less likely to leak public funds or be absent from the classroom if they are held accountable. Public expenditure tracking surveys allow policy-makers to diagnose how incentives and accountability systems are working in practice and how they can be improved. Among results which may emerge from the PETS are estimates of leakage, information on the percentage of funds spent at each level of the education hierarchy, descriptions of how funding is targeted among different schools and subpopulations, information about school facilities, teacher quality and absenteeism, drop-out rates, test scores, school governance and accountability. Applied as a diagnostic survey, a PETS can provide statistics that show the scale of the problems. To point towards solutions, analysts must dig deeper, framing and testing hypotheses in order to discern the causes of those problems. (From the Executive Summary) 



Reinikka, Ritva. and Svensson, Jakob. 2003. Survey Techniques to Measure and Explain Corruption. Washington, DC, World Bank.

This paper discusses survey techniques aimed at a better measurement of corruption at the micro level and argues that with appropriate survey methods and interview techniques, it is possible to collect quantitative micro-level data on corruption. Public expenditure tracking surveys, service provider surveys, and enterprise surveys are highlighted with several applications. These surveys permit measurement of corruption at the level of individual agents, such as schools, health clinics, or firms. They also permit the study of mechanisms responsible for corruption, including leakage of funds and bribery. (Abstract in the paper) 



Reinikka, Ritva. and Svensson, Jakob. 2001. Explaining Leakage of Public Funds (Policy Research Working Paper 2709). Washington, DC, World Bank.

Using panel data from a unique survey of public primary schools in Uganda, Reinikka and Svensson assess the degree of leakage of public funds in education. The survey data reveal that on average during 1991-95 schools received only 13 percent of the central government's allocation for the schools' nonwage expenditures. Most of the allocated funds were used by public officials for purposes unrelated to education or captured for private gain (leakage). The survey findings had a direct impact on policy in Uganda. As evidence on the degree of leakage became public knowledge, the central government enacted a number of changes: it began publishing monthly transfers of public funds to the districts in newspapers, broadcasting them on radio, and requiring schools to post information on inflow of funds. An initial assessment of these reforms shows that the flow of funds improved dramatically, from 13 percent on average reaching schools in 1991-95 to around 90 percent in 1999. These improvements emphasize the role of information in mobilizing "voice" for better public expenditure outcomes. (From summary findings in the paper)



UNESCO. 2004. Implementing and Financing Education for All - Education Policies and Strategies 6. Paris, UNESCO.

This is the sixth volume of the Education Policies and Strategies series. Far from excessive theorization, it is, first of all, a compendium of good professional practices. With the themes it covers, UNESCO aims to share its experience, not only with education planners, but also with the eider group of people who are interested in the elaboration and the implementation of education policies and strategies. Devoted to Implementing and financing Education for All, this issue is the summary of the presentations and debates of the participants at the International Seminar on Financing and Implementing National Education Plans organized by UNESCO in the Republic of Korea from 17 to 21 September 2003, in collaboration with the Sun Moon University, the National Commission for UNESCO and the Ministry of Education and Human Resource Development of the Republic of Korea. With this publication, UNESCO aims to widely disseminate among the specialists of other countries the lessons learned from the diverse experiences of the participating countries. We hope that the different national contributions we are presenting here will provide food for thought during reflections and debates for the improvement of the planning and implementation processes of the education policies of other countries in their endeavour to take up the challenge of the achievement of the Education for All Goals. (From the back cover) 



Winkler, Donald R. 2005. EQUIP 2 Policy Brief: Public Expenditure Tracking in Education. Washington, DC, USAID.

Developing countries have increased spending on primary-secondary education in recent years to fulfill their commitment to quality education for all. However, several countries have been disappointed in the results of their additional investments and have begun to explore the reasons for the meager gains. The Public Expenditure Tracking Survey (PETS) has been an important tool in these investigations. (From the introduction) 



World Bank. 2005. Cambodia: Public Expenditure Tracking Survey (PETS) in Primary Education. Washington, DC, World Bank.

Weaknesses in Cambodia’s public expenditure management system - including the difficulty in channeling funds down to service providers - have resulted in costly inefficiencies in the effectiveness of expenditures in improving social welfare outcomes. In response to these problems, the Royal Government of Cambodia initiated implementation in 2000 of the Priority Action Program (PAP), which was intended to delivery resources to front line service delivery units in the priority sectors in a timely manner. The introduction of PAP in education also represented a major change in terms of resource allocation and education sector strategy. PAP education was launched in 10 provinces in 2000 and expanded to cover all provinces in 2001. PAP shifted the focus of education policy toward basic education, in general, and demand-side constraints in particular. The assessment of the primary education Priority Action Program (PAP 2.1), which provides for schools’ operational budgets and accounts for over one quarter of the entire PAP budget in education is the subject of this report, which is based on a survey of two hundred schools in seven provinces carried out in 2004. (From the Executive Summary) 



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