IdentifyingtheImpactofEducationDecentralizationonthe.pdfVIP

WORKING PAPER Identifying the Impact of Education Decentralization on the Quality of Education Introduction Low-quality education is an endemic problem in most developing countries. International tests of student achievement consistently show that developing countries score at the bottom of the performance scale. In many countries, raising education quality has replaced expanding coverage as the principal challenge facing education ministries. In fact, a recent study by Hanushek titled “Th e Long Run Importance of School Quality” shows large economic gains associated with improvements in education quality. Th e U.S.-based study ? nds that a one standard deviation increase in student achievement—enough to lift U.S. school performance to that of the best-performing European educational systems—would yield a 1 percent increase in the rate of per capita economic growth and, in 30 years, would generate a $1.4 trillion change in gross domestic product (GDP). Th e importance and the impact of raising education quality gives added weight to the question, “Can education decentralization raise quality?” Education decentralization policies are prevalent around the world. Th e objectives of such policies—especially those increasing school autonomy and local governance—may include improving service delivery, but more commonly involve shifting political power or funding responsibilities. Whatever the motivation for education decentralization, such policies may lead to improvements in the quality of education. Th is paper examines the potential of education decentralization to improve performance, as re? ected in educational outcomes and changes in the determinants of those outcomes in three parts: ? Th e conceptual arguments for such a relationship ? Th e empirical evidence of the impacts of education decentralization ? Better design and implementation of decentralization policy to leverage its impact on quality Conceptual Arguments for