UC Berkeley

One of the main goals of most governments and international agencies is to improve education, but this task has proven to be elusive. Evidence shows that just increasing resources is not enough to improve outcomes. Therefore, institutional reforms have been proposed to improve the delivery and financing of education. School Based Management (SBM) is one such institutional reform where decision making is transferred to the school level. Funds are transferred directly to the school and parents, along with teachers and the principal, allocate and oversee the use of program funds. By increasing parental and community involvement in schools, SBM is expected to improve education because it is expected to increase accountability and monitoring of school personnel, align incentives and match resource allocation to school needs. Additionally, SBM seeks to increase school autonomy and implement assessments and evaluations. With these ideas in mind, the Mexican Education Ministry has implemented SBM programs in over 30% of elementary public schools in the country.

Even though SBM programs are popular, evidence on the effects of such programs in the country show mixed results. Moreover, there has been no attempt in the literature to explore the underlying mechanisms at work. This dissertation is an effort to learn from the Mexican experience with two SBM programs: The largest SBM program in Mexico and a randomly allocated program in the state of Veracruz. The Quality Schools Program (Programa Escuelas de Calidad , PEC) was first implemented in 2001 and provides an opportunity to learn how SBM has evolved with time. The Veracruz experiment provides short run information on participation by parents on school related activities which is not available for PEC and overcomes the potential self selection problem that has plagued SBM evaluations so far.

The mechanisms I explore are five. First, I analyze how the programs change the cash transfers that parents voluntarily make to the school. If parents substitute voluntary contributions with program funds then the program causes crowding out. In this case there would be no change in resources available to the school and therefore no effect from improved conditions on the quality of education. Second, I analyze whether the matching scheme of PEC creates incentives for parents to increase voluntary contributions and if so, whether the incentive is different for rich and poor schools. Third, I analyze how the program caused parents to change their time investment. Parents may use program funds to either complement or substitute their participation on school related activities. Fourth, I make use of improved data availability to make a more accurate assessment of the effects of the programs on the quality of education as measured by standardized test scores and failure rates. Finally, I analyze if the effects of PEC change over time. Evidence in the United States shows that it may take five to eight years to see improvements in education because school constituents need to learn and adjust to the new institutional framework. On average, Mexican elementary schools have fewer resources than those in the United States and therefore they may face higher returns. As a result, the program may have an effect in the short run.

This dissertation is organized as follows: Chapter I is an analysis of the effects of PEC on voluntary contributions, standardized test scores, failure rates and dropout rates over time, chapter II is a study on the effects of PEC on voluntary contributions as a function of school income and chapter III analyzes the effect of the randomized Veracruz experiment on voluntary contributions, parent participation, standardized test scores and failure rates. Voluntary contributions are cash transfers that parents choose to make to the school to cover salient needs. The contribution amount is set at the beginning of the school year by the parent's association and once it is set, all parents are expected to pay it. Payment is socially enforced. I find no evidence of any of the two programs causing crowding out. Moreover, I find that the matching scheme of PEC creates an incentive for parents in the poorest schools to increase voluntary contributions more. Therefore matching works as a targeting device because more government resources go to the schools with greater needs. More specifically, schools located in localities with medium, high and very high marginality increase voluntary contributions by $0.22.- while those in low or very low marginality areas increase them in $0.11.-. Both increases are small compared to a typical voluntary contribution of $10.72.- and therefore there is no increase in dropout rates as a result of larger voluntary contributions. On the opposite, PEC decreases the probability of a student moving to a different school in urban areas. Therefore parents may be more satisfied with school services. There is no effect on voluntary contributions on the Veracruz experiment which lacks the matching scheme in PEC. In this program, funds and institutional improvements in the school act as a way to balance parent participation. I find that parents that spent less than 5 hours per month in school related activities increase participation while those that spent more than 7 decrease it. I find no effects of either of the two programs in the short run on the quality of education as measured by standardized test scores and failure rates. For the Veracruz experiment where data is available, it is observed that most program funds were invested on infrastructure improvements and therefore it is not surprising not to find effects in the short run. Consistent with findings in the US, the effects of PEC are larger as the school gains experience. Moreover, initial adjustments have a slight negative effect. For example, the average math test score decreases in one point the first year but increases 4 points in the fourth year. The average math test score is 487 points on a scale that ranges from 200 to 800, therefore changes are small but increasing.

Future research is needed to better understand the effects of SBM. More detailed data on how parents and other school constituents react to the program is needed. It is important to explore the processes that the program put at work to understand why the effects change with time. More importantly, it is relevant to analyze the changes that bring improvements on the quality of education. More detailed data and more experiments with careful variation in intervention components could shed light on the underlying mechanisms at work. This is relevant given the large investment the country is making on these kinds of programs. If we learn from the experience, future programs can be adjusted and improved to further improve the quality of education in the country more efficiently. This knowledge could not only benefit Mexico but other countries such as Argentina, Bangladesh, Guatemala, Honduras, India and Sri Lanka which are implementing and operating similar programs.