Jordan public expenditure review issues in education
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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

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Jordan public expenditure review issues in education

Jordan: Public Expenditure ReviewIssues in Education

Ayesha Vawda

June 18, 2003


Outline

Outline

  • Purpose of PER in Education

  • Key Questions to be Addressed

  • Data Requirements


Purpose of per in education

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

Key Questions

  • How much is spent?

  • How does government finance?

  • What does government finance?

  • Should government finance?

  • Does public spending protect equity?

  • Is the public getting its money’s worth?

  • How much is enough?


How does the per define the sector

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

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

How much does government spend on education (as a % of GDP), 2000


What share of total public spending has gone to education in jordan

What share of total public spending has gone to education in Jordan


Private expenditure

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

Private expenditure as % of total

Netherlands

Bolivia

France

UK

0%

50%

100%

S. Africa

Malaysia

Venezuela

Ghana

USA

Indon.

German.

Peru

Uganda

Sierra Leone

Source: Psacharopoulos and Nguyen 1995 “Fighting Poverty: the role of government

and the private sector” World Bank.


Private enrollment as of total

Private enrollment as % of total

Kuwait

France

Netherlands

Mauritius

0%

50%

100%

Mexico

USA

Niger

Cyprus

Australia

Korea

Chile

Belgium


Is public spending sustainable

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

Education Reform for Knowledge Economy

JD m

450

Baseline Scenario

400

Reform Scenario A

350

300

Reform Scenario B

250

200

1

2

3

4

5

6

7

Years


2 how does government finance

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

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

3. What does government finance? Budget share by level of Education


What does government finance budget share by type of expenditure basic and secondary 2000

What does government finance? Budget share by Type of Expenditure (Basic and Secondary, 2000)


Are wages crowding out complementary outputs

Are wages crowding out complementary outputs?

% of total current education expenditure for teacher’s compensation, 1997

Jordan75.0

Low income67.5

Lower-middle income64.1

Upper middle-income47.8

Higher income57.3

Source: World Development Indictors, 2001


4 should government finance

4. Should Government Finance?

  • Supply and Finance of Education Originally Private

  • And, why not?

  • So why should government intervene?


Because market failure

Because….Market Failure

  • Equity

  • Externalities

  • Capital market imperfections

  • Information asymmetries


Child mortality by education of mother

Child Mortality by Education of Mother


But government failure

But…Government Failure

  • Equity

  • External Efficiency

  • Internal Efficiency

  • Sustainable finance


Disparities between girls and boys enrollment

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

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

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

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

So What is the Answer?


Emerging role of government

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

Financing and Provision


5 does public spending protect equity

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

Distribution of Expenditures by Income Quintile

Poor get less education


What else to check

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

6. Is the public getting its money’s worth?

  • Measuring educational outcomes

  • Improving quality of public spending:

    • Spending on the right thing

      • Correcting for market failures

      • Demand vs. supply side interventions

    • Efficiency in spending

      • Absorptive capacity

      • Leakages and M&E


Outcomes

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 achievement

Education Expenditure and Achievement

TIMSS Ranking

Maths

Science

2817

825

12 8

1818

2620

2734

3 3

9 6

2422

3127

6 2

2 4

14 9

United States

Switzerland

Austria

Canada

Norway

Denmark

Japan

Netherlands

New Zealand

Spain

Czech Rep.

Korea

Hungary

0

2,000

4,000

6,000

8,000

Expenditure/student


Efficiency

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


Efficiency1

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

--

--

School Size of MOE Schools in Jordan


Cost efficient school size

Cost Efficient School Size

Amortized cost of Capital and Equipment

New Schools for student sizes:Vertical

1,200 720360Extension

Construction58,53942,04029,666 608

Furniture & Equip13,55812,54911,791 80

Computers 7,914 7,914 7,914

Total80,01162,50349,371 688

Per Student (JD) 67 87 137 19


School construction alternatives

School Construction Alternatives


Jordan public expenditure review issues in education

Cost-Effectiveness Analysisof Inputs for Portuguese Achievement, Brazil

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

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


7 how much is enough

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

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

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


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