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Jordan: Public Expenditure Review Issues in Education. Ayesha Vawda June 18, 2003. Outline. Purpose of PER in Education Key Questions to be Addressed Data Requirements. Purpose of PER in Education. Assess how much is spent on education Evaluate allocation across levels and inputs - PowerPoint PPT Presentation
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Jordan: Public Expenditure ReviewIssues in Education
Ayesha Vawda
June 18, 2003
Outline
• Purpose of PER in Education
• Key Questions to be Addressed
• Data Requirements
Purpose of PER in Education
• Assess how much is spent on education
• Evaluate allocation across levels and inputs
• Analyze efficiency of resource use
• Gauge whether public financing is being used to minimize poverty
Key Questions
1. How much is spent?
2. How does government finance?
3. What does government finance?
4. Should government finance?
5. Does public spending protect equity?
6. Is the public getting its money’s worth?
7. How much is enough?
How does the PER define the sector?
• Basic education only?
• All levels of formal education?
• Does it include training?
• R&D operations attached to universities?
1. How much is spent on education?
• Public expenditures – as % of GDP and of total public expenditures
• Private payments– For public services (informal payments, formal
cost recovery by level of education)– For private services
• If not integrated into public budget: donor grants and loans
How much does government spend on education (as a % of GDP), 2000
2.7
3
3.6
4.1
4.6
4.6
4.7
5.1
5.3
5.5
5.7
0 1 2 3 4 5 6
Uruguay
Turkey
Chile
Korea
Hungary
WEI Average
Brazil
United States
OECD Average
Jordan
Portugal
What share of total public spending has gone to education in Jordan
0%
5%
10%
15%
20%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Current Capital Total
Private expenditure
• ECD: 99% private
• Basic and Secondary: 14% private, 12% UNRWA
• Tuition fees account for 30% of university recurrent expenditures
Private expenditure as % of total
0% 50% 100%
S. AfricaMalaysia
BoliviaFranceUK
VenezuelaGhanaUSA
Indon.German.
PeruUgandaSierra Leone
Source: Psacharopoulos and Nguyen 1995 “Fighting Poverty: the role of government and the private sector” World Bank.
Netherlands
Private enrollment as % of total
0% 50% 100%
MexicoUSANigerCyprus
KuwaitFrance
AustraliaKorea Chile
Belgium
NetherlandsMauritius
Is public spending sustainable?
• Macro-economic projections• Government’s sectoral goals that impact
costs:– Education Reform for Knowledge Economy
• Demographic projections for school-age projections
• Government’s goals that affect intersectoral allocations
Education Reform for Knowledge Economy
200
250
300
350
400
450
1 2 3 4 5 6 7Years
JD m
Baseline Scenario
Reform Scenario A
Reform Scenario B
2. How does government finance?
• Intergovernmental fiscal relations– Central vs. local financing?– Tax rate setting authority for governorate?– Subventions to governorates?
Conditional/unconditional?– Local “top up” in education financing?
2. How does government finance? contd.
• Budget framework and process– Recurrent and capital budgets delinked?– NGO/Donor/IFI financing linkages with
government budget– Accumulating arrears? Why?
3. What does government finance? Budget share by level of Education
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Higher
General
What does government finance? Budget share by Type of Expenditure (Basic and Secondary, 2000)
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Current Capital
Composition of Current Expenditures
Salaries, Wages andAllow ances
Other
Transferrable expenditures
Other current expenditures
Are wages crowding out complementary outputs?
% of total current education expenditure for teacher’s compensation, 1997
Jordan 75.0Low income 67.5Lower-middle income 64.1Upper middle-income 47.8Higher income 57.3
Source: World Development Indictors, 2001
4. Should Government Finance?
• Supply and Finance of Education Originally Private
• And, why not?• So why should government
intervene?
Because….Market Failure
• Equity
• Externalities
• Capital market imperfections
• Information asymmetries
Child Mortality by Education of Mother
Mali 1995-96
Bolivia 1994
Uganda 1995
Philippines 1993
Nepal 1996
Yemen 1991-92
Morocco 1992
Deaths per 1,000 live births
No Education Primary Only Secondary or higher
But…Government Failure
• Equity
• External Efficiency
• Internal Efficiency
• Sustainable finance
Disparities between Girls’ and Boys’ Enrollment
• 1990, avg 6-year-old girl in low, mid-income country: 7.7 yrs of school; up from 6.7 yrs, 1980
• Gap between boys and girls widest in S. Asia: 1990, girl could expect 6 yrs of school; boy, 8.9
• Middle East: girl 8.6 years, boy 10.7
Government Failure: External Efficiency
• Over-subsidized higher education– In Africa, spending per student in higher
education is 44x that per primary student
• Continuing high proportion of secondary education that is supply-driven vocational education
• Tertiary more costly than primary
Government Failure: Sustainable Finance
• Increasingly difficult to meet demand for education, especially where little economic growth (e.g. Africa)
• Aid can help, but not sustainable
Service Delivery
Public schools lack spur for efficiency• Operated by Government• No competition• Teachers paid according to experience
and education, not performance• Schools closed or opened depending on
demographics, not how well they perform
So What is the Answer?
• Market has strengths and weaknesses (“failure”)
• Government has strengths and weaknesses (“failure”)
• Draw on strengths of both market and government
• Minimize weaknesses of both
• Context-specific
Emerging Role of Government
Draw on Market Strengths• Matching of Demand and Supply• Competition• Willingness to pay
Draw on Government Strengths
• Broad National Vision• Capacity to redistribute and
promote equity• Information
Avoid Market Failure• Promote Equity• Achieve Externalities• Overcome Capital Market
Imperfections• Overcome Information
Asymmetries
Avoid Government Failure• Promote Equity• Avoid Inefficiency• Achieve Sustainable Finance
Financing and Provision
Provision
Financing Private Public Private
Private schools Home schooling
User fees
Public
Vouchers Charter schools Contracting out
Traditional public schools
5. Does public spending protect equity?
• Check for variations by level in:– Enrollment ratios– Completion rates– Learning outcomes
• Between:– Poverty quintiles– Regions (rural/urban)– Genders– Minorities vs. majorities
Distribution of Expenditures by Income Quintile
0
10
20
30
40
50
Armenia 1996
Côte d’Ivoire 1995
Nepal 1996
Nicaragua 1993
Romania 1994
Vietnam 1991
Poorest 20% 2 3 4 Richest 20%
Poor get less education
What else to check
• Fiscal decentralization
• Formal and informal private payments by level and poverty status
• Public subsidies/transfers to students by level and poverty status
• Public subsidies of nonpublic schools
6. Is the public getting its money’s worth?
• Measuring educational outcomes
• Improving quality of public spending:1. Spending on the right thing
• Correcting for market failures• Demand vs. supply side interventions
2. Efficiency in spending• Absorptive capacity• Leakages and M&E
Outcomes
• What are the trends in:– Enrollment rates– Completion rates– Expected years of education and training during lifetime– Average learning outcomes– Variance in learning outcomes– Employment rates and wages for recent graduates
• Are trends going in the right direction? Fast enough?• Compare outcomes to those for regional neighbors
and countries at similar incomes. If major differences, why?
Education Expenditure and Education Expenditure and AchievementAchievement
0 2,000 4,000 6,000 8,000
United StatesSwitzerlandAustriaCanadaNorwayDenmarkJapanNetherlandsNew ZealandSpainCzech Rep.KoreaHungary
TIMSS RankingMaths Science
28 17 8 2512 818 1826 2027 34 3 3 9 624 2231 27 6 2 2 414 9
Expenditure/student
Efficiency
• Cost implications of curricula structure (e.g. specialized teachers, textbooks, IT)
• Efficiency of ratios between quantities of different inputs (e.g., schools, classes, teachers, students, textbooks)
• Estimated savings/costs of reducing/increasing quantities of different inputs
• Estimated costs of achieving savings• Estimated savings of reducing repetition
rates/dropout rates
Efficiency
• Cost/benefit and cost/effectiveness analyses– Prices for teachers and non-teaching staff– Facility design and construction materials (best cost
per year over lifetime)– Consolidation of facilities– In-service training options– Textbook printing standards– Utility use– Maintenance schedules
• Rough estimates of savings/costs from adopting different standards and policies
School Size of MOE Schools in Jordan
No.of Students Per School
No. of Schools
% of MOE Schools
Cumulative %
Less than 100 706 25.2 25.2
101 – 200 478 17.0 42.2
201 – 400 710 25.3 67.5
401 – 600 375 13.4 80.9
601 – 800 254 9.1 89.9
More than 800 282 10.1 100.0
Total 2805 -- --
Cost Efficient School Size
Amortized cost of Capital and EquipmentNew Schools for student sizes: Vertical
1,200 720 360 Extension
Construction 58,539 42,040 29,666 608
Furniture & Equip 13,558 12,549 11,791 80
Computers 7,914 7,914 7,914
Total 80,011 62,503 49,371 688
Per Student (JD) 67 87 137 19
School Construction Alternatives
New Schools with 720 students each without capacity
utilization
Capacity utilization and
some new construction
Capacity utilization, 20%
vertical extensions and
some new construction
Students needing places 157,365 117,836 117,836Classrooms Required 4371 3273 3273Number of extensions 0 0 655Number of schools 219 164 131Cost of construction 110,820,671 82,983,196 66,386,557Cost of vertical extension 4,013,608Total Cost of Construction and equipping 110,820,671 82,983,196 70,400,165
Capital costs as a proportion of MOE General Education budget 2001Total 43.98% 32.93% 27.94%Annually for 5 years 8.60 6.59% 5.59%
Input
Water
School furniture
School facilities
Hardware
Textbook usage
Writing materials
Software
Teacher salary
Training
Logos II
4 year primary
3 years secondary
Cost (US$)
1.81
5.45
8.80
16.06
1.65
1.76
3.41
0.39
2.50
1.84
2.21
5.55
Achievement change by input (coefficients)
3.513
-5.650
7.228
8.969
6.403
4.703
4.864
0.055
-0.160*
3.594
3.177
2.383
Achievement gains per US$ spent
1.94
-
0.82
0.56
3.88
2.67
1.43
0.14
-
1.95
1.44
0.43
Cost-Effectiveness Analysisof Inputs for Portuguese Achievement, Brazil
7. How much is enough?
• Using comparators:
• Compare expenditures to:– Regional neighbors– Countries at similar income levels
• But: comparators are imperfect benchmarks, no matter how selected– Number of students differ, prices differ
Is public spending adequate?
On the basis of country context, depends on:• Thoughtput volume (# of school age hildren
and their enrollment rates)• How efficiently resources are used• Government’s goals for the sector that affect
spending• Mobilization of private resources (e.g., private
provision, cost recovery)
Date Requirements
• Measures of outcomes: existence of assessment system, household surveys
• Measures of inputs and costs: school and household surveys with expenditure data, program data, administrative data on budget allocations and spending
• Impact evaluation data to estimate program effectiveness