Public Funding in the Educational strongSectorstrong and its Effect on.pdfVIP

Public Funding in the Educational Sector and its Effect on Test Scores* Evidence from Uganda Martina Bjˆrkman** June 2004 Abstract This paper uses a difference-in-difference approach to evaluate a public policy program in the primary education sector in Uganda and more specifically, if it had an effect on the pupils educational performance, i.e. on average test scores in standardized test. The program was introduced in the 1990s by the government of Uganda, and two key components in the program were a per-student capitation grant disbursed directly to the schools and the removal of user fees in primary schools. In this study, I evaluate if the public grants disbursed to the primary schools had any effect on the district average test score in the Primary Leaving Exam. The effect is estimated on district level, and the study uses the variation between districts in exposure to the capitation grant program to identify treatment and non-treatment district. I find that the capitation grant was indeed successful: on average, pupils in districts which were highly exposed to the per-capitation grant program scored 0.42 standard deviations (1.46 points) better in the Primary Leaving Exam than pupils in districts that were less exposed to the program. This corresponds to an improvement of roughly 6 percent in test score of the average pupil in Uganda. Further, the result is robust to controlling for income per capita. ____________________________________ *Preliminary first draft. I wish to thank the Uganda National Examination Board for sharing their data with me. I am also grateful fo