The power of information in public services: Evidence from education in Uganda

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Abstract

In this paper we argue that innovations in governance of social services are an effective way to improve outcomes such as attainment of universal primary education. To test this hypothesis we exploit an unusual policy experiment: a newspaper campaign in Uganda aimed at reducing the capture of public funds by providing schools (parents) with systematic information to monitor local officials' handling of a large education grant program. Combining survey and administrative data, we show that public access to information can be a powerful deterrent to the capture of funds at the local level and that the reduction in the capture of funds that resulted had a positive effect on school enrollment and learning outcomes.

Research Highlights

► Governance innovations can be an effective way to improve education outcomes. ► A newspaper campaign in Uganda provided schools/parents with information to monitor local officials' handling of a large education grant program. ► Public access to information was a powerful deterrent to the capture of funds. ► Reduction in the capture of funds had a positive effect on school enrollment and learning outcomes.

Introduction

The literature on education policy in developing countries focuses predominately on the last link in the service delivery chain; i.e., using a variation across schools or students to estimate the impact of various programs and inputs at the school level. A growing literature based on randomized trials have also helped start building consensus of what works, what doesn't, and why. However, a country's ability to improve education outcomes is not only determined by what happens at the school level, but by the behavior of different actors and agencies involved in the design and implementation of education policy. As service delivery in many developing countries is often plagued by inefficiencies and corruption, interventions that focus on improving governance in general and governance of social services in particular can be an important complement to more traditional school-based interventions to increase enrollment and student learning.1

To examine this hypothesis we exploit an unusual policy experiment. Towards the end of 1997, the Ugandan government began to publish systematic public information on monthly transfers of capitation grants to districts in the national newspapers. The newspaper campaign came in response to evidence of extensive capture and corruption in the education sector — in 1995 schools received on average only 24% of the total yearly capitation grant from the central government (Reinikka and Svensson, 2004). The campaign was intended to enhance head teachers' and parents' ability to monitor the local administration and to voice complaints if funds did not reach the schools.

Using the survey data and administrative data from the Ugandan Ministry of Education, we link school enrollment and average primary leaving exam scores with data on the capture of funds and distance to the nearest newspaper outlet. A school's exposure to the newspaper campaign is determined both by the timing of the campaign and schools' (parents') access to newspapers. Exploiting variation over time (before and after the newspaper campaign was initiated) and across space (distance to a newspaper outlet), we find that public access to information can be a powerful deterrent to the capture of funds at the local level and that the reduction in the capture of funds was associated with an increase in enrollment. We also find positive, albeit weaker, effects on student learning (test scores). The results suggest that the effect on the quantity of education of making more resources available at the schools (through reduced local government capture) is of the same order of magnitude as some of the more cost-effective school interventions that have been evaluated based on randomized design.

This paper links to a large literature on education policy in developing countries (for surveys see Glewwe, 2002, Glewwe and Kremer, 2006) as well as a small but growing microempirical literature on corruption.2 It adds to the former by focusing on the governance of social services and by exploring the effects of making untied funds available to schools. It adds to the latter by relating changes in measured corruption to changes in socioeconomic outcomes.

The next section describes the data used in the empirical analysis and the method used to quantify the capture. Section 3 describes the situation before the newspaper campaign and lays out the key components of the reforms in the late 1990s. In Section 4 we discuss the empirical strategy. Section 5 presents the empirical evidence of reduction in the capture of funds on school enrollment and learning results. Section 6 concludes.

Section snippets

Data

The data used in this paper come from two sources: survey data on capture/corruption from two public expenditure tracking surveys, and enrollment and test score data from administrative records. Summary statistics are reported in Table 1, Table 2, Table 3.

Public expenditure tracking surveys were conducted in 1996 and 2002.3

Pre-campaign period

For more than two decades, Uganda has had a national policy of financing instructional material and other non-wage spending at primary schools through a capitation grant. The grant is a nationally set annual allocation per student and is intended to go to the schools, either in-kind or as a direct financial transfer. The capitation grant is the second largest program in the overall school budget for primary schools, which is dominated by teachers' salaries. District offices are used as

Identification assumption

The identification strategy builds on two assumptions. First, prior to 1998 — before the government began to systematically publish data on disbursement — schools' knowledge about the grant program was largely a function of own effort and ability. Second, schools/communities closer to a newspaper outlet will be more exposed to information disseminated through newspapers. Controlling for time and school fixed effects, our strategy is thus to use distance × timing as an instrument for exposure

Enrollment

Table 7, column 1, depicts the estimates from the first-stage regression (3′). Schools that are more exposed to the newspaper campaign; i.e., closer to a newspaper outlet, experience a significantly larger reduction in district government diversion of funds after the campaign starts. As the effect is non-linear (distance is the logarithm of distance in kilometers to the nearest newspaper outlet), a change in distance has a larger effect the closer the school is to a newspaper outlet (see Fig. 3

Discussion and conclusion

What is the most effective way to increase primary school enrollment? In this paper we have argued that innovations in the governance of social services may yield a high return since social service delivery in developing countries is often plagued by inefficiencies and corruption. We exploit an unusual policy experiment to examine this hypothesis: a newspaper campaign in Uganda aimed at reducing the capture of public funds by providing schools (parents) with information to monitor local

Acknowledgements

We are grateful for comments by Michael Kremer, Torsten Persson, David Strömberg, and participants at MacArthur Research Network on Inequality and Economic Performance Meeting, CEPR Annual Public Policy Symposium, Berkeley, IIES, and the World Bank, as well as constructive suggestions from two anonymous referees and the editor, Thomas Piketty. We also wish to thank the World Bank Research Committee, the Department for Research Cooperation of the Swedish International Development Agency, and the

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