Annex 2 - Financing Primary Schooling: An Analysis of Alternatives

Introduction

As noted in Chapter 5, the mobilization of a commitment to provide Education for All (EFA) must be based on an ability to estimate and then finance the costs of this endeavor. Each country, within its definition of the specific targets to be reached by the year 2000, and its individual structural and cost contexts, will have to estimate the financial requirements for EFA. However, a body of knowledge does exist on the alternative means of improving efficiency and of broadening the economic base of support for EFA.

For the World Conference on Education for All, Messrs. C. Colclough and K. Lewin prepared a paper entitled Educating All the Children: Meeting the Economic Challenges of the 1990s; this paper summarizes many of the available policy alternatives and is the basis for this annex. The authors, however, are not responsible for the form and content of this presentation.

Policy Alternatives

Six major areas of policy reform exist to assist in improving the financial capacity of nations to support EFA.

1. Unit cost reductions in present system
2. Cycle cost reductions in present system
3. Capital cost reductions in present system
4. Restructuring of educational delivery
5. Redistribution of existing expenditures
6. Developing alternative modes of finance

To those working in developing countries none of the alternatives proposed are “new” and many already have been tried and found to be unacceptable for political, economic, cultural or pedagogical reasons. They are provided here as a “checklist” of alternatives and not as a set of advocated strategies: each country will have to adapt or adopt those alternatives best suited to its context.

Unit cost reductions refer primarily to attempts to reduce aggregate teacher costs and to change the teacher-pupil ratios. In many countries teacher salaries already are excessively low so future containment of teacher costs, if necessary and desired, can be accomplished only through the increased uses of lower cost personnel. Reduced teacher-pupil ratios can be a result of class size increases or of multiple shifting of teachers.

Cycle cost reductions refer to more effective use of student time through reduced attrition and the elimination of unproductive repetition.

Capital cost reduction alternatives include the use of day versus boarding schools where practical and multiple shifting of facilities when the population of students justifies this. Low maintenance designs also are a key to controlling future costs.

Restructuring of educational delivery includes the alternatives of: (1) changing the length of the education cycle, (2) changing the age of entry, (3) introducing organizational and pedagogical reforms, and (4) promoting national service and linking education to production. The primary cycle length increasingly has been standardized at six years but recently has extended to nine years as the “basic education” level for many countries; six years of age is the common entry age - attempts to delay age of entry have encountered serious political opposition.

Among the organizational and pedagogical reforms proposed are increases in the number of days and number of hours of instruction, change in the dependence on lecture (whole class) formats, improved remediation and enrichment opportunities, use of distance education technologies, and of programmed teaching and learning systems. These alternatives may improve efficiency but often do so at a higher aggregate and per pupil cost level. The use of national service requirements and linking education to production activities may have both a pedagogical benefit (by increasing relevance) and a financial one (by providing services or goods to society).

Redistribution of existing expenditures may take five major forms (examples given are indicative only):

1. Between sectors - from military/security and debt repayment to education.

2. Between educational delivery systems - from formal to nonformal (including traditional) alternatives.

3. Between levels within education - from higher education to primary.

4. Between institutional types - from public to private, boarding school to day school, vocational/technical to general.

5. Between types of expenditure - capital to recurrent costs, salary recurrent to non-salary recurrent (e.g., instructional materials).

In all such reallocations the goal is to move from the expensive to the less expensive and from noneducational to educational activities.

The alternative modes of finance that deserve consideration are:

1. Private schools

2. User charges

3. Loans and scholarships

4. Expanded tax collection

5. New tax forms (graduate tax, payroll tax on employment of graduates, taxes earmarked for education, and lotteries earmarked for education)

6. Expanded forms of community support

Each of these alternatives must be judged in terms of the same criteria of revenue efficiency and equity by which all revenue schemes are evaluated.

Reforming Policy.

Colclough and Lewin, based on their analysis of country experiences, identify the most promising set of reforms as including:

· reduced repetition
· double shift teaching
· increased class sizes
· replacement of boarding with day schools
· shift some capital and recurrent cost to communities
· develop new taxes and cost recovery methods for financing tertiary education

They recognize that all of these policies are not appropriate for all contexts and that, in the poorest nations, successful introduction of all of these still may not provide financing adequate for EFA.

Three final caveats should be added to this discussion. First, all financing and efficiency alternatives must be considered within the definition of an acceptable quality of EFA. Second, cost reductions are not identical to increased efficiency. Many efficiency improvements in EFA will require more not less money - as noted in the text nothing is more wasteful than expenditures that produce no educational benefits. Third, countries with 20 to 25 percent of its population outside school can anticipate that, because of the location and marginalization of these populations, the cost of their inclusion will be a significant multiple of present per-pupil costs.

This list of alternative means of increasing efficiency and broadening the economic base for EFA has no obvious answers for the policy maker or educational planner. However, it does offer a starting point for the important debates that must take place in each country over the next decade as all try to attain their EFA targets.