Getting A’s on the three F’s: The Educational
and Fiscal Opportunities in Decentralization
Lant Pritchett
Varad Pande
Outline (but with several big “asides”)
Decentralization and Primary Education
Reform in India: The Two Questions
An Analytical Approach to Decentralization
– Using First Principles
Fiscal issues
A ‘Modest Proposal’ for Reform
Decentralization And Primary Education Reform in India
Indian Needs
Primary Education
Reform
India is Trying to
Decentralize

73rd and 74th Amendments to the
Constitution devolve political
power to local governments

States modify Acts and hold
elections to local governments

Functions in XI and XII Schedules
devolved to local governments
Question 1:
How to Do Education Delivery in this
Decentralizing Context

Continued low enrolment,
completion and achievement
despite central and state schemes
(and Sarva Shiksha Abhiyaan)

Much lower educational indicators
for poor, who suffer
disproportionately
Question 2:
Is Well-Designed Decentralization the Right
Model for Primary Education Reform?
Decentralization in India Has to date been Unbalanced and
Incomplete
10
Unbalanced Decentralization in India in an
International Context
Decentralization Index (0-10)
Fiscal
Administrative
Political
‘Unbalanced’
Decentralization
• Political
Decentralization
has happened
(election of PRIs)
but…
5
• Administrative
and Fiscal
Decentralization
remains weak
0
UP Rajasthan MP
Source: World Bank (1999)
AP
Kerala Poland Chile Colombia
Decentralization and Education
• Decentralization is no panacea—there are
enormous risks to decentralization that
could worsen service delivery
• Badly designed decentralization also has
fiscal risks (and missed opportunities)
• Getting the “three F’s” properly aligned is
difficult
Decentralization is Neither a Necessary
nor Sufficient Condition for High Quality Education
Correlation between Decentralization Indicators and Primary Education Outcomes

0.75



0.50














0.25





0.00
1.00
1.00






0.75





0.50



 


0.25







0.00
0.0
20.0
40.0
60.0
children not reaching grade 5 (%), 1992-95
Admin decentralization (Schneider)
Fiscal decentralization (Schne ider)
Political decentralization (Schne ider)

1.00
0.0
20.0
40.0







 
0.50
children not reaching grade 5 (%), 1992-95










0.25



0.00
60.0

 
0.75
0.0
20.0
40.0
60.0
children not reaching grade 5 (%), 1992-95
Source: Analysis based on data from Governance and Service Delivery Indicators Dataset, Pippa Norris, Kennedy School of Government, (2004)
No evidence of high correlation between decentralization
and education outcomes in cross-country analysis
The problem that a State Finance
Commission Faces
Assign
“vertical shares”
(revenues)
• Central
Finance
• State
• Local
Assign functions
(across tiers)
?
Functions
• Education
• Health
• Roads
• Water
A plausible sounding procedure:
• Assign functions (across tiers of PRI) by sector
and activity (including mandates for minimum
standards—e.g. universal primary education)
• Cost those functions at the standards
demanded/expected
• Calculate the vertical share to transfer adequate
resources to each tier to carry out its functions—
make revenue assignments
Our Analytical Approach To Effective Decentralization
Unbundling
What are the key
functions and
activities in Primary
Education?
•Disaggregate into
functions and
activities:
- Logical, mutually
exclusive and
exhaustive
(MECE)
functional
classification
- Consistent with
Indian public
administration
delivery system
Status quo
Analysis
Who provides
these functions
and activities
today in India?
•Analyze de jure
functional
allocation of each
tier by studying
existing legislation
•Analyze de facto
functional
allocation (on-theground picture) by
conducting surveys
and interviews
First Principles
of Public Finance
and Accountability
Functional
Allocation and
Recommendations
How to decide who
should provide
which functions and
activities?
What changes are
required to the
current system of
service delivery?
•Use First
Principles of
Public Finance find
optimal allocation
from public finance
perspective
•Based on this
systematic analysis,
propose changes to
current system
•Use First
Principles of
Accountability to
address the
accountability
issues
•Develop a detailed
proposal for
reform of primary
education that
draws on the
findings of our
analytical approach
Step 1: Unbundling
Question: What are the Key Functions and Activities in Primary Education?
Functions and Activities in Government Primary Schooling in Rural India
Activity
Responsibility
State
District
Block
User
Groups
Central
Gram
Panchayat
Village
Service
Provider
(school)
Function
Curriculum design
Learning achievement standards
Plans for physical expansion
Planning
Plans for quality improvement
Social Capital
Asset Creation Physical Capital
Beneficiary Selection
Choice of students for targeting programs
Enrolment
Operation - Non Recurrent
Textbook choice/purchase
Teacher
Learning materials
Maintenance
Maintenance of school buildings/facilities
Monitoring of school processes
Hiring
Assignment
Operation Training
Salary
Teacher
Supervision
Dismissal
Standards
Monitoring and
Tests of learning achievement
Evaluation
Output: A Mutually Exclusive and Exhaustive Classification of Primary Education into Functions and Activities
Step 2: Status Quo Analysis
Question: Who provides these functions and activities today?
Functional Allocation in Primary Education – DE JURE
Function
Responsibility
State
Govt
District
Block
User Groups
Central
Govt
Gram
Panchayat
Village
Service
Provider
(school)
Lessons
Standards Setting
Planning
• Current system is
highly
centralized with
little role for PRIs
/ User Groups
Asset Creation
Operation - Non teacher
Operation - Teacher
Monitoring and Evaluation
Functional Allocation in Primary Education – DE FACTO
Function
Responsibility
Standards Setting
State
Govt
little, not systematic
Planning
Asset Creation
Operation - Non teacher
Operation - Teacher
Monitoring and Evaluation
little, not systematic
District
Block
User Groups
Central
Govt
Gram
Panchayat
Village
Service
Provider
(school)
• Schools /
teachers have
little or no
autonomy… or
accountability
Step 3: Use First Principles: Public Finance
What are the First Principles of Public Finance?
Principle
Explanation

Activities with significant economies of scale
should be done by a higher level of government
The actions of one agent
affects other agents

Activities with significant externalities should be
done at a higher level of government, so that the
‘external’ effect can be ‘internalized’ in the
system
Need for equitable
spread in inputs,
process or outcomes

Equity may imply financial support to education at
a large enough geographic scope to allow for
redistributive transfers to equalize across smaller
units
Variation in local needs
and preferences
between regions

The more heterogenous the demand for the
activity is likely to be, the more locally it should be
done
Economies of
Scale
Unit Cost of production
declines as scale of
production increases
Externalities
Equity
Heterogeneity of
Demand
Implication
Step 3: Use First Principles – Public Finance
Economies of Scale
What is the size of ‘optimally sized catchments area’ of a
service provider to jurisdiction?
State
Population: 30-80 million
Zilla Parishad
Population: 800,000-2 million
Block Panchayat
Population: 60,000-600,000
Gram Panchayat
Population: 2,000-20,000
Step 3: Use First Principles – Public Finance
Economies of Scale
Optimal Catchments Areas for LEVELS of Education
Universities
State
Population: 30-80 million
Zilla Parishad
Population: 800,000-2 million

Whereas the
optimal
catchments area
for a primary
school is at
village level (GP
jurisdiction)…

…the optimal
catchments area
for a University
is district / state
level (State
jurisdiction)
Block Panchayat
Population: 60,000-600,000
Gram Panchayat
Population: 2,000-20,000
Secondary Schools
Primary schools
Step 3: Use First Principles – Public Finance
Economies of Scale
Optimal Catchments Area for FUNCTIONS of Primary Education
Setting learning achievement
standards
Monitoring and Evaluation
(process and outcome)
State
Population: 30-80 million
Zilla Parishad
Population: 800,000-2 million

Whereas the
optimal
catchments area
for Operations is
at village level
(GP
jurisdiction)…

…the optimal
catchments area
for a Setting
Learning
Standards is
state level
(State
jurisdiction)
Planning
Block Panchayat
Population: 60,000-600,000
Asset
Creation
Gram Panchayat
Population: 2,000-20,000
Operation
Primary
School
Step 3: Use First Principles – Public Finance
Economies of Scale
Functional Allocation according to Economies of Scale Criterion`
Function
Economies of
Scale
Standards Setting
Planning
Asset Creation
Operation - Non teacher
Operation - Teacher
Monitoring and Evaluation
Public Finance First Principle
Externalities /
Heterogeneity of
System-wide
Equity
Demand
Effects
State
District
Block
GP
School
Step 3: Use First Principles – Public Finance
Equity
Equity Concerns
are Important
Gross Enrolment Rate - UP (2003-04)
120
80
40
0
104.0
74.5
44.0
Muzaffarnagar
Lucknow
Muradabad
Gross Enrolment Rate - Kerala (2003-04)
120
80
40
0
120.0
85.6
59.8
Kannur
Kollam
Idukki
Source: DPEP MIS Database http://www.dpepmis.org/webpages/edatabase.htm
Equity Doesn’t
Require
Centralization

Major inequity / variations in primary education levels exists
between districts within states

This creates equity rationale for centralization of education
delivery

This does not imply all functions in primary education should
be done by higher levels of government….

As long as Standard Setting and M&E are done by higher level
of governments, AND redistributive equalizing fiscal transfers
are done, goal of equity can be achieved
Step 3: Use First Principles – Public Finance
Equity
Functional Allocation according to Equity Criterion
Function
Economies of
Scale
Public Finance First Principle
Externalities /
Heterogeneity of
System-wide
Equity
Demand
Effects
Standards Setting
Planning
-
Asset Creation
-
Operation - Non teacher
-
Operation - Teacher
-
Monitoring and Evaluation
State
District
Block
GP
School
Step 3: Use First Principles – Public Finance
Functional Allocation according to First Principles of Public Finance
Function
Economies of
Scale
Public Finance First Principle
Externalities /
Heterogeneity of
System-wide
Equity
Demand
Effects
Standards Setting
Planning
-
Asset Creation
-
-
Operation - Non teacher
-
-
Operation - Teacher
-
-
Monitoring and Evaluation
Standard Setting and Monitoring by State Government, and Asset
Creation and Operation by low-level PRIs is effective
State
District
Block
GP
School
Step 3: Use First Principles - Accountability
What are the First Principles of Accountability?
TransactionIntensity
Discretionary
Activities that require
decisions to be made using
individual judgment in local
context
Activities that require
several repeated
transactions at the local
level
Implication
Where can performance
be better inferred –
locally or technically
Does the service require decisions made
in local context? (Discretionary)
Examples
Does the service require
many local transactions?
(Transaction Intensive)
Inferring
Performance
No
No
Yes
Immunization
Yes
Central Banking
Ambulatory Care
Activities that are Discretionary, TransactionIntensive and Locally Observable require local input
for accountability
Aside on Accountability: Quality of Government
Primary Schooling in India is very low…especially
for the Poor
Framework for Judging Quality
Enrolment
Completion
Percent of 6-14 yr olds
currently in school
(1998-99)
100%
75%
Average
78.8%
Achievement
Percent of children with Inadequate
Primary Learning Achievement for
Math of Age for Class 5 or in Grade 5
Percent of 15-19 yr olds
completed at least Grade 8
(1998-99)
100%
100
96.9%
81.7%
75%
65.4%
50%
50%
25%
25%
Average
49.6%
85.5%
75
67.6%
Not reaching Grade 5
Scoring < 50% in Grade 5
(Govt School)
69.7%
53.8%
50
24.7%
25
0%
0%
Bottom 40%
Top 20%
Bottom 40%
Top 20%
0
Karnataka
Kerala
Rajasthan
West
Bengal
Note: Framework adapted from Warwick and Reimers (1995); Enrolment and Completion data from ‘Educational Attainment and Enrollment Profiles’, Filmer (2004); test scores analysis for
government and government aided schools only based on data from Singh, Jain, Gautam and Kumar (2005)
…+ Anecdotal Evidence of low quality (Pratichi Trust, PROBE Report, etc.)
…+ Evidence of student migration from government to private schools
AOA: Learning achievement from
Baseline study in AP
Mechanical learning to a large extent.
Single digit addition : 18% of students (for example 3+3)
Single Digit Subtraction: 12% of students (for example 9-2)
Counting Kites : 54% of Students
Highest percentage in any class is 77% of Students (which is low)
Best performances are in number concepts in maths and in following
instructions and recognising letters/sounds associated in language
AOA: Learning by age
Math Level By Age
100% 3%
6%
90%
7%
10%
Percent in Age Cohort
80%21%
15%
12%
26%
70%
60%
18%
25%
27%
19%
16%
30%
32%
Math Level = 3
17%
17%
Math Level = 2
33%
32%
Math Level = 1
Math Level = 0
15%
29%
33%
50%
40%
71%
30%
32%
32%
24%
25%
20%
20%
11
12
13
14
57%
44%
20%
34%
10%
0%
7
8
9
10
Age
* Data based on the testing of 17,608 children in 4 random blocks in the District of Jaunpur, UP. Child
tests are weighted by total number of children in village divided by number of children tested in village.
AOA: The low quality is caused by ‘systemic’ and not
‘managerial’ failures; and thus requires an institutional solution
Evidence
Teacher Absence Rates by Country
%
30
25
25
20
Teacher
Absenteeism
“Best practice”
level of absence
27
19
17
16
15
14
15
11
10
5
0
Uganda
India
Indonesia
Zambia
Level of Parental Dissatisfaction
(West Bengal)
Level of
Parental
Satisfaction
60.0%
Ecuador
Peru
Country
Source: Kremer et al (2004), pg 9
75%
Bangladesh Papua New
Guinea
59.0%
100%
75%
50%
50%
25%
25%
0%
Grades given by Parents to
Child’s school (USA)
72.0%
21.0%
7.0%
0%
with child
progress
with teacher
A or B Grade
C Grade
D or F Grade
Source: The Pratichi Education Report (2002); Berliner and Biddle (1994) pg 113

‘Non’ Teaching: “Teaching practices have been reduced to a
minimum…it has become a way of life” (PROBE)

Growth of Private Schooling…which meets the differentiated
(quality) demand…even among the poor (Tilak et al.)
Other Evidence
2%
2%
Assam
12
%
Bihar
Jharkhand
More than half
in private
14
%
14
%
29
%
25
%
35
%
40
%
Chile's share of primary
in private schools (with
full privatization) is
45.5%
Orissa
Haryana
0.25
55
%
54
%
53
%
2/3 or more in
private
47
%
0.5
69
%
68
%
67
%
66
%
65
%
0.75
0
West
Gujarat
Chhattisgarh
Himachal
Rajasthan
Andhra
Madhya
Karnataka
Uttar
Tamil Nadu
Maharahstra
Kerala
Uttaranchal
Percent of students in urban areas in
recognized schools in private (aided or
unaided) schools
Result: People voting with their feet
(and pocketbooks) out of the sectors:
AOA: What is ‘Accountability’? –
Demystifying the Elements of the Accountability Relations
There are Five Features to Any Accountability Relationship
Example 1:
Feature
What
Buying a Sandwich
Example 2:
Going to a Doctor
Delegation
You give a task to the
accountable ‘agent’

You ask for a
sandwich

You go to the doctor
to be treated

You pay for the
sandwich

Financing
You give the ‘agent’ the
money to do the task
You pay the doctor for
the treatment
The ‘agent’ does the
assigned task

The sandwich is
made for you

The doctor treats you
to try cure your
ailment
Performing
Informing
Enforcing
You find out how well
the ‘agent’ has done the
work

You eat the sandwich
which informs you of its
quality

You see if you are feeling
better – you assess the
performance of the
doctor
You reward good
performance and punish
bad performance

You choose whether to
buy a sandwich from the
seller the next time,
affecting his profits

You go to him next
time (if he was good)
or choose to go
somewhere else if not
Systemic failures are rooted in Inadequate Accountability
Relationship 1: VOICE – The Long Route, first leg
Policy Makers
Citizens

Citizens can elect Policy
Makers based on quality of
public services they receive
(VOICE)…

But, Citizens…
-
may vote along ethnic /
ideological lines
(DELEGATION)
-
may not be able to attribute
service to appropriate
Policy-Maker (INFORMING)
-
may think Policy-Maker
tenure is too short
(ENFORCING)
Systemic failures are rooted in Inadequate Accountability
Relationship 2: COMPACT, long route second leg
Policy Makers

Well-meaning Policy Makers
can influence Service
Providers to improve service
delivery performance
(COMPACT)…

But, Policy Makers…
-
may not be able to specify
exact contracts
(DELEGATION)
-
may not be able to monitor
Service Providers
(INFORMING)
-
may not be able to alter
incentives of Service
Providers (ENFORCING)
Service Providers
Systemic failures are rooted in Inadequate Accountability
Relationship 3: CLIENT POWER – The Short Route
Citizens

Clients can play major role in tailoring
service-mix to their local needs and
monitoring Service Providers (CLIENT
POWER)

But, Clients…
-
often do not have choice (lack of
competition)
-
often cannot infer provider effort
(INFORMING)
-
often do not have powers to discipline
bad Service Providers (ENFORCING)
CLIENT POWER
Service Providers
Pratichi Trust (A. Sen’s NGO)
report on West Bengal:
“According to you what are the main
problems of primary schooling?”
The Sabhapati of a Panchayat Samiti in
Puruliya needed no time to reply:
“Teachers do not teach.”
AOA: Accountability at the local
level…Pratichi Trust report:
We, the villagers, forced him to come to
school at 10:30 and made him stay in the
school until 3:30…”
Says a villager in Puruliya
AOA: local client power?
“We, the villagers, forced him to come to
school at 10:30 and made him stay in the
school until 3:30…”
Says a villager in Puruliya
Result of this attempt at local accountbility?
“He slept, got his body massaged by the
children, and read the newspaper. How
long can you watch him leaving aside your
own work?”
Systemic failures are rooted in Inadequate Accountability
The Three Relationships of Accountability in Service Delivery
Policy Makers
Citizens
Source: World Development Report, 2004
CLIENT POWER
Service Providers
AOA: The key missing accountability relations in Primary Education
between parents and teachers are Informing and Enforcing
Feature of
Accountability
Delegation
Is this the Key
Problem?
Evidence
Is it important for your child to be educated?
Source:
Somewhat: Diffused
objectives but Parents
100%
50%
want to delegate (i.e., send
children to school)
Financing
Boy
8-13.5
10
no powers to discipline or
reward teachers
are not performing
adequately
1.8
0
West and
Central
Africa
South and
Eastern
Africa
Asia
Latin
America
% Households Aware of Existence and activities of Community Structures
50%
25%
34.0%
29.0%
VECs
PTAs/MTAs
0%
Yes, parents have little or
Performing
Note: Uttar Pradesh figure is
for 1995-96; all others are
quoted from Carnoy and
Welmond (1996);
Source: Mehrotra and
Buckland (2001)
5.9
1.8
performance; parents not
actively involved in school /
teaching matters
Yes, many teachers 40
Average = 6.1
7.3
5
very well relative to
other countries
Yes, no usable info on class
Enforcing
Girl
Average Salaries as multiple of Income per capita by Region
Uttar
Pradesh
Informing
Yes 98%
0%
15
No, teachers are paid
PROBE Report, pg 14
Yes 89%
Source: CAG Report (2001)

Kremer et al (2004) find only one case of teacher dismissal ever in
3000 government schools surveyed

No monetary incentives possible for high performing teachers
under current government teacher terms of employment
Teacher Absence Rates by Indian States
%
All India Average 25%
37.8
25
10
21.2
21.7
23.7
24.7
Kerala
Karnataka
Rajasthan
West Bengal
Bihar
AOA: Alternative Explanations for Low Quality are
Unlikely to be Sufficient
Enrollment rate among 5-11 year olds
% 80
1
Lack of Adequate
Public Expenditure
75
Budget expansion
approaches don’t seem
to have worked in India
– e.g.: District Primary
Education Program
(DPEP)
DPEP Districts
Non-DPEP
Districts (with
same criteria)
70
65
1993
2
Presence and
Demand for Child
Labor
1999
Source: Jalan and Glinskaya (2003)

Child labor is not big enough – NSS (1993) shows only 8 percent

Most child laborers work as family labor, so their time is fungible

Even if child labor is ‘high’, direction of causality is not clear
Parents’ Attitude to Education in India
3
Lack of Parent Interest
Is it important for a boy
to be educated?
No
Response 1%
Source:
PROBE Report, pg 14
Is it important for a girl
to be educated?
No
Response
1%
No 1%
Yes 98%
No 10%
Yes 89%
Parents, even
poor parents,
seem keen to
educate their
children
End of long aside on
accountability?
• Publicly provided primary education is not
performing well
• Accountability is a key problem
• Decentralization alone won’t improve
accountability
• But possibly decentralization informed by
accountability analysis can improve
services
Step 3: (back from long aside on accountability) Use First
Principles - Accountability
What are the First Principles of Accountability?
TransactionIntensity
Discretionary
Activities that require
decisions to be made using
individual judgment in local
context
Activities that require
several repeated
transactions at the local
level
Implication
Where can performance
be better inferred –
locally or technically
Does the service require decisions made
in local context? (Discretionary)
Examples
Does the service require
many local transactions?
(Transaction Intensive)
Inferring
Performance
No
No
Yes
Immunization
Yes
Central Banking
Ambulatory Care
Activities that are Discretionary, TransactionIntensive and Locally Observable require local input
for accountability
Step 3: Use First Principles –
Accountability
Functional Allocation according to First Principles of Accountability
Accountability First Principle
Function
Discretionary?
Transaction
Intensive?
Who Can Best Infer
Performance
(Technical or Local)?
Low
Low
Technical
Medium
Medium
Local /Technical
Asset Creation
High
Medium
Local /Technical
Operation - Non teacher
High
High
Local
Operation - Teacher
High
High
Local / Technical
Medium
Medium
Local / Technical
Standards Setting
Planning
Monitoring and Evaluation
Discretionary, Transaction-intensive and Locally Evaluatable activities
like Asset Creation and Operations should be decentralized to PRIs
Step 4: Optimal Allocation based on
First Principles Analysis
First Principles of Accountability
First Principles of Public Finance
Function
Economies of
Scale
Accountability First Principle
Function
Public Finance First Principle
Externalities /
Heterogeneity of
System-wide
Equity
Demand
Effects
Discretionary?
Transaction
Intensive?
Who Can Best Infer
Performance
(Technical or Local)?
Standards Setting
Standards Setting
Planning
-
Planning
No
No
Technical
Somewhat
Somewhat
Bit Technical
Local
Asset Creation
-
-
Asset Creation
Yes
Yes
Operation - Non teacher
-
-
Operation - Non teacher
Yes
Yes
Local
Operation - Teacher
-
-
Operation - Teacher
Yes
Yes
Local / Technical
Monitoring and Evaluation
No
Monitoring and Evaluation
Yes
Key Messages
Functional Allocation in Primary Education –
Based on First Principles Analysis
Function
Technical

States do
Standards
Setting and
Monitoring

PRIs assume
responsibility for
actual Operation
-
As much as
possible as low as
possible
-
Higher PRI tiers
back-up on
professionalism,
technical
Responsibility
State
Govt
District
Block
Standards Setting
User Groups
Central
Govt
Gram
Panchayat
Village
Service
Provider
(school)
Planning
Asset Creation
Support
Operation - Non teacher
Support
Operation - Teacher
Support
Monitoring and Evaluation
As discussed, Many Models of Education
Decentralization have not worked well
1

Decentralize without
unbundling
2
Indonesia Experience
-Pushed all functions to district level (below provinces)
-Bad monitoring systems means that little information about
regional performance is available to stimulate competition
or disseminate good or bad practices
Decentralize NonTeacher Operations
(But not Teacher
Operations)

Decentralize
Functions,
concurrently, without
devolving F or F

Latin America Experience
-Pushed responsibility to local governments…
-…But without enhancing operational control at local level
(e.g.: Argentina)
3
India Experience (1995-2005)
-Devolved functions (including primary education) to PRIs…
-…But PRIs do not have adequate finance or control over
functionaries to implement their mandate
But our Analysis Avoids these Pitfalls by Suggesting
Countervailing Forces to build accountability via decentralization
The Two Big Messages from Our Analysis
1
Strengthen Centre

and State for
Standard Setting and
Monitoring
Consistent Standard Setting is Critical To Provide the Guiding
Framework for Local Governments to Operate and Manage

Uniform Monitoring is Essential for Quality Control, Designing
Rewards & Recognition Systems and Generating Credibility
Responsibility
State
2
Greater Operational
Responsibility to
PRIs, especially
forTeachers
Standards
Planning
Asset Creation
Operation - Non Teacher
Operation - Teacher
Hiring
Assignment
Training
Salary
Supervision
Dismissal
Monitoring and Evaluation
-
District
Block
User
Groups
Central
Gram
Panchayat
Village
Service
Provider
(school)
Function
What we are not saying
“just turn schools over to GPs/SMCs”—
without clear “delegation” and without
strengthening the “information” and
“enforcement” this just pushes the problem
lower.
“Districts play no role”
Districts play key role at the technical level
in planning and pedagogical support
Here is where it gets interesting for
“finance”
• Suppose for a minute that a state
government has decided to follow these
recommendations and is going to devolve
primary education to PRIs (for real).
• What does the “finance” F corresponding
to this “function” F look like?
• It all depends on the “functionaries” F
Four alternatives:
• Full-on voucher scheme (a la Chile)—equal
transfer per (weighted) student to all schools,
public and private (not discussed).
• “Functionaries” remain a “state” problem so
financing is dual (cash and in kind)
• “Functionaries” are transferred to schools with a
cash budget but wages/employment conditions
fixed
• “Functionaries” are transferred and “block grant”
financing.
What is the key fiscal issue?
• How does one compute the per child “standard
unit cost” of a year of school (ignoring capital
costs)?
[That is, the formula for a block grant could have
all kinds of weights—for girls, for SC/ST, for
“marginality”—off of a standard unit cost]
SUC=Teacher cost + non-teaching cost
Teacher cost/child= (wage per teacher)*(number of
teachers)/(number of children)
Teacher wages: the key parameter
Desiderata: “Level and structure of
compensation appropriate to attract,
retain, and motivate teachers of desired
quality.”
• Structure is awful (for all goals)
• Level of compensation?
Ratio of weekly earnings
Level of teacher compensation?
2.5
2
1.5
1
0.5
0
1.9
2.1
1.48
Public
sector to
privateformal,
1993/94
1.68
Public
Public
Public
sector to sector to sector to
privateprivateprivateformal, formal, PSM formal, PSM
1999/00 corrected, corrected,
1993/94
1999/00
• Gov’t vs. organized
pvt sector is high.
• Teachers vs. private
sector is high.
• Existing teachers vs.
“contract” or
“alternative” teachers
is high.
• International
comparisons is high.
Pluses and Minuses of Alternatives: GPs/SMCs don’t H/F/A
teachers, teachers are “assigned” and come “in kind”
Pluses
Minuses
• No political fight with
teachers
• GPs/SMCs do control
“operating” budgets
and possibly some
gains there.
• Accountability won’t
work—no gains from
decentralization
• No cost savings
GPs/SMCs control teacher H/F/A,
unit cost at current wages, wages
fixed
Pluses
Minuses:
• Accountability might
work at the local level
• No fiscal savings
• No reallocation to
more productive uses.
• With complete control
and high wages
corruption is
inevitable.
GPs/SMCs control teacher H/F/A,
unit cost at current wages, wages
market determined
Pluses
Minuses:
• Accountability might
work at the local level
• Reallocation to
productive uses
(within education,
between education
and other uses?)
• No fiscal savings to
state
GPs/SMCs control Assignment,
unit costs at “true” cost, wages
market determined
Pluses
Minuses
Best chance for
accountability
Fiscal savings shared
state/PRI
Reallocation to other
uses
Enormous political
battle with
teachers/teachers
unions
One integrated proposal:
Functions
• Centre/state sets curriculum, learning
achievement targets and takes responsibility for
monitoring and evaluation.
• District takes responsibility for: planning asset
creation (schools), hiring in eligible pool and
promoting teachers, technical support (e.g.
supervision, in service training) [with block].
• GP/SMC takes responsibility for all other
aspects of the operation of schools (including
assignment of teachers from eligible pool).
One integrated proposal:
Finances
• Single block grant to GPs[SMCs] on a weighted
per student basis with “efficient” SUC as the
base (plus a transition fund to finance the gap of
existing teachers)
• Set aside block grants to GPs/SMCs for
“technical” functions (tied to district?).
• Slice for district to carry out its single
responsibility functions (planning, assets)
• Slice for state for “high level” functions
(especially for monitoring and evaluation).
One Integrated Proposal:
Functionaries
• The “DTPC”—a mix between existing
“contract” teachers and existing
“state/district” cadres with eligibility at
district level, assignment at GP/SMC level.
• Tricky issue of “who bears the cost of
unassigned ‘permanent’ teachers?”
Big unresolved issues
• Block grant fungible across activities?
• Relationship between GP and SMC?
• Details of “transition fund”—reconciling
supply/demand of existing teachers
Evidence Suggests The “alternative” schools are Showing
Considerable Success
Experiment One: SSK Schooling in West Bengal
Student Attendance
on day of visit
Teacher Absenteeism
on day of visit
100%
Dissatisfaction with
Teacher (Parent Response)
75%
 Higher
50%
75%
Accountability
can offset
enormous other
disadvantages
25% higher
50%
64.0%
50%
51.0%
25%
25%
62% lower
25%
43% lower
24.0%
0%
14.0%
0%
Primary
School
SSK
Primary
School
 Greater
9.0%
20.0%
autonomy for
performance and
local
responsiveness
works
0%
SSK
Primary
School
SSK
Experiment Two: Shiksha Karmi (SK) in Rajasthan
%
Test Scores
Enrolment and Attendance
100
15% higher
85
83
80
72 71
60
14% higher
55
52
27% higher 51
63
60
wages do
not appear to
reduce
motivation
16% higher
63
60
 Lower
46
51
SK
40
42
Rajasthan
40
SK School
33
All India
20
20
0
Enrolment Rate Attendance Rate
0
Grade 1 Grade 4 Grade 1 Grade 4
Source: Analysis based on data from - West Bengal: Pratichi Education Report 2002; Rajasthan:
World Bank PAD for Rajasthan DPEP, 1999, SIDA Evaluation Study and NSSO 52nd Round
Math
Other Rural
Rajasthan
Language
AOT: But the ‘Para-Teacher’ Model Is Not a Sustainable Systemic
Solution to India’s Primary Education Crisis – Its Only a Quick Fix
Index of Primary School Teacher Salary in India
Rs.
1
‘Regular’ Government
School Teacher
(Rs 5000-9000)
8000
Variance in Pay for
Identical Work is
Starkly Visible
6000
4000
Para-teachers
(Rs 900-3500)
2000
‘Regular’
Government
Teachers get paid
3-6 times more
than para-teachers
0
Index
2
Pressure for ‘ex-post
regularization’
3
Variance in Quality of
Training, Instruction
and Outcomes

States under pressure to ‘regularize’ para-teachers when parateacher lobby becomes substantial

Unplanned and ad hoc regularization can bankrupt already fiscally
drained states

Quality of instruction varies immensely as no standards are
established for hiring, training, performance evaluation and
contract duration, e.g.:
- Qualification requirement for para-teacher varies across
states from Grade 5 pass to Higher Secondary
- Training requirement for para-teachers varies across states
from 12 days to 2 years
Note: Analysis of Teacher pay based on survey of para-teacher schemes in Govinda and Josephine (2004) and other studies of para-teacher systems in India
We Make a Modest Proposal that Combines the Best
Elements of the Current Formal and ‘Para-Teacher’ Systems
A District Professional Teacher Cadre (DPTC)
Phases of Teacher Professionalization
Phases of
Employment
Apprentice
(Shiksha Karmi)
• Initial hiring done on
renewable contract
basis by ZP on GP
recommendation
• Assignment to
schools depends on
GPs
Associate
(Adhyapak)
• Permanence granted at
end of contract periods,
based on comprehensive
evaluation
- Technical Criteria:
training, input indicators,
teacher tests, peers
Bottoms Up Criteria:
Performance review and
recommendation by
GP/SMC
• Assignment still depends
on GP (match S-D?)
Master
(Maha-Adhyapak)
• Few promoted to
‘Maha-Adhyapaks’
based on
consistently
exceptional
performance
evaluation ratings
The DPTC will have an initially fixed, and then a
performance and seniority based compensation system
3
Compensation
(Rs.)
1
Step jump if qualify
for Maha-Adhyapak
Key Messages
3 Elements of
Performance
Based Pay

Initially fixed pay,
later performance
and senioritybased

Big jumps in
salary levels
across phases to
serve as incentive
to perform

Jump to MahaAdhyapak rare
and controlled,
most spend
career as
Adhyapaks
Step jump when
qualify for Adhyapak
2
Annual increment based on
review, when Adhyapak
Years of service
Apprentice
(Shiksha Karmi)
Associate
(Adhyapak)
Master
(Maha-Adhyapak)
How Does Our Proposal For Teachers Stack Up
Against Existing Systems in India?
Existing Formal
Government
Existing
Para-teacher
Existing
Private
Our Proposal
(DPTC)
Hiring
•Done by state
government
•Done by GP,
criteria varies
•Done by school
management
•Done by ZP on
criteria + GP
recommendation
Assignment
•Done by state
government
•Stays within
village
•Done by school
management
•Done by ZP on GP
recommendation
(GP has veto)
•Done by state
government, and
district-level line
agency
•Varies: district line
agency or parallel
agency
•Varies: states have
guidelines + large
unrecognised sector
•Organized by ZP
based on guidelines
for phased training
Salary
•Fixed (and
generous) scale
for life
•Fixed and small
(‘honorarium’)
•Usually fixed (and
somewhere between
formal and parateacher scales)
•Fixed when SK;
seniority and
performance-based
when Adhyapak
Supervision
•Little or none in
substance
•Closely monitored
by SMC/VEC or
GP
•Closely monitored
by school
management
•Closely monitored
by GP/SMC +
technical criteria
•Almost never
done
•At will for
unsatisfactory
performance
•At will for
unsatisfactory
performance
•At will when SK;
For cause when
Adhyapak stage
reached
Training
Dismissal
Accountability Linkages in Existing System:
The SSA Framework
Policymaker (State and Central Government)
HRD Ministry (Elementary
Education Bureau)
‘Client Power’ is
particularly weak
in the present
framework
Project Approval Board
State Government
COMPACT
VOICE
Organizational Provider
State Department of School
Elementary Education
MANAGEMENT
Client Groups
School Management
Committee (SMC) or
VEC
Parent Teacher
Association (PTA)
Frontline
Provider
CLIENT
POWER (?)
Schools
(Teachers)
State Implementation Society
District Education Committee
/ Office
Block Education Committee /
Center
Accountability Linkages in Our DPTC Proposal:
Redefining Voice, Compact and Client Power
Policymaker (State and Central Government)
HRD Ministry (Elementary Education
Bureau)

COMPACT
strengthened as PRIs
get management of
TTEs

VOICE gets
strengthened as clients
see importance of
participation in
governance and
service delivery
decision

CLIENT POWER gets
strengthened as
SMCs/PTAs are
involved in meaningful
performance evaluation
Project Approval Board
State Government
Policymaker (PRIs)
Zila Panchayat
Taluk Panchayat
Gram Panchayat
VOICE
Gram Sabha
Client Groups
School Management
Committee (SMC) or
VEC
Parent Teacher
Association (PTA)
COMPACT
Organizational Provider
State Department of School
Elementary Education
CLIENT POWER
Frontline Provider
Schools (Teachers)
Our Proposal Addresses Many of the Central Concerns of
the Political Economy of Reform and Transition
Issue / Concern
How It is Dealt With in Our Proposal
Opposition from existing
‘Regular’ Government
Teachers
• ‘Grandfathering’: i.e., TTEs of all existing regular
government school teachers to remain unchanged – no
one is dismissed + salary protection
Unfair Exploitation of
‘para-teachers’
• Para-teachers no longer exploited, as they are given a
clear track for tenure (career progression plan) as per
technical and bottoms-up criteria
Bakrupting the PRIs by
making them pay the
teachers
Quality of Schooling
Outcomes
• State gives transitional funds to PRIs to bear premium
wage cost of existing ‘regular’ teachers
• Large block grants to PRIs to fund their new role
• Balances local control with higher level support for
training, professional standards and monitoring
Not Addressing Question 2: Is a well designed Decentralization
the Right Model for Primary Education Reform?
Indian Needs
Primary Education
Reform

Continued low enrolment,
completion and achievement
despite central and state
schemes (and Sarva Shiksha
Abhiyaan)

Much lower educational indicators
for poor, who suffer
disproportionately
Question 2:
Is Well-Designed Decentralization the Right
Model for Primary Education Reform?