Education policy makers increasingly recognize that schools are often in a better position than central government agencies to make effective decisions on some aspects of teaching and learning. In many countries, school grants provide the discretionary funds schools need to implement their own improvement plans. While many grants are given to schools without conditions, some countries are beginning to link funding to school performance in an attempt to incentivize schools to focus on their central objective to improve student learning.
Unconditional school grants have improved enrollment and raised student completion rates but have been less successful at improving student learning. Grants have mainly been introduced alongside policies to abolish school fees and have improved school participation rates by reducing the financial burden on households due to the costs of sending their children to school. Since grant programs compensate for lost fee revenues, they often leave overall school funding levels unchanged and fail to provide significant discretionary funds that could help to boost student learning.
School grants that link overall levels of funding to performance or results are less common in developing countries, and evidence on their impact on learning outcomes is mixed. In Indonesia, performance-based school grants improved secondary school learning outcomes but had no long-term impacts on primary student outcomes.
Careful consideration of the design of performance based grants is needed because the limited evidence suggests that they can have a detrimental impact on equity across schools. Higher-performing schools, which tend to have wealthier students, are more likely to get more money under performance-based programs, increasing the gap between rich and poor schools. To avoid this, programs could have schools of similar backgrounds compete, could weigh absolute change in performance, or could restrict participation to poorer schools.
Jakarta: Can Self-Evaluations and Soft Performance Contracts Help Schools Achieve Education Standards?
Tazeen Fasih, Kevin Macdonald, Unika Shrestha, Santoso , Wisno Harto Adi Wijoyo, December 2019
Cameroon: Can School Grants and Teacher Incentives be Used to Increase School Access and Improve Quality?
Charles Che, Vincent Perrot, Yevgeniya Savchenko, April 2019
Indonesia: Can Performance-Based School Grants Improve Learning?
Samer Al-Samarrai, Unika Shrestha, Amer Hasan, Nozomi Nakajima, Santoso Santoso, and Wisnu Harto Adi Wijoyo, October 2017 | Complete report
The Democratic Republic of Congo: Can Incentives to Take Home Textbooks Increase Learning?
Jean-Benoit Falisse, Marieke Huysentruyt, and Anders Olofsgård, February 2019
Can School Grants Buy Learning? It’s Debatable
Jessica Lee, December 2015
Do School Grants Buy Student Learning? No
David Evans, December 2015
Can School Grants Buy Learning?
Debate, November 2015