Aid Effectiveness and the Role of Donor Intervention in the Education Sector in Pakistan - a Review of Issues and Literature

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Aid Effectiveness and the Role of Donor Intervention in the Education Sector in Pakistan - a Review of Issues and Literature
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  RECOUP Working Paper 6Aid Effectiveness and the Role ofDonor Intervention in the EducationSector in Pakistan – a Review ofIssues and Literature Rabea Malik Mahbub Ul Haq Human Development CentreJuly 2007  © Research Consortium on Educational Outcomes and Poverty WP07/06 RECOUP Working Paper No. 6 Aid Effectiveness and the Role of Donor Intervention in the Education Sector in Pakistan – a Review of Issues and Literature Rabea Malik Mahbub Ul Haq Human Development Centre Abstract This paper summarises the evolution of education policy in Pakistan over the past two decades and provides a preliminary assessment of the role of donors in this process. It shows that educational outcomes have been consistently poor, relative both to other countries and to the government’s own  policy targets. The paper argues that with the shift of aid modalities away from projects towards sectoral  programmes and, more recently, budget support, the direct impact of financial aid on educational outcomes has become more difficult to trace. Nevertheless – not withstanding some successes - the generally poor performance of the education sector does not provide obvious evidence for aid’s  beneficial effects. Correspondence: Rabea Malik, Research Fellow, Mahbub ul Haq Human Development Centre, 42 Embassy Road, G-6/3, Islamabad, Pakistan. Telephone: + 92 51 227 1228/1608 Email:   1  1.   Introduction This paper makes a first attempt to examine the impact of donor assistance (financial, technical and policy oriented support) on primary education outcomes in Pakistan. The discussion synthesises issues from international literature on development assistance to education. The political economy literature on the subject traces the influence donors have had in defining education policy discourse, nationally and internationally, ultimately shaping the outcomes of education sectors in recipient countries. The economics of education literature presents the various theories that drive the international  political economy discourse of education. The impact of development assistance on education outcomes entails assessing aid effectiveness and the role donors play in policy making. Aid effectiveness encompasses issues of money, delivery, efficient allocation and sustainability. Section 1 presents issues of education financing and arguments for why financial aid was necessary for developing countries. The section briefly reviews statistics relating to international financing in Pakistan. Section 2 presents an overview of literature on the education sector in Pakistan. A brief historical look at education policies reveals disconnected targets and expenditures, inconsistencies in policy evolution, failure of monitoring and accountability and lack of management information systems to inform policy development. Section 3 focuses upon aid effectiveness, reviewing the impact aid has on outcomes of education by analyzing the various channels though which it could impact education outcomes. Section 4 concludes. 2. Education Financing The provision and financing of education, especially primary education, is a responsibility of the  public sector. Reasons for this range from the impact of market imperfections, the differences between social and private returns which result in sub-optimal investment in education, and the role of education as a merit good which justifies support over and above private individuals judgment to be necessary for themselves or their children. As a result, education at the primary level around the world is government funded. Levels and systems of financing are linked to outcomes of education. International literature on education financing indicates that some of the more important constraints to primary school enrolment, attendance and completion can be addressed through public spending on schooling. These constraints include distances from home to school, poor school quality, prohibitive private unit costs etc. “Increased expenditures can help to improve school availability and quality; they can, by substituting for fees and other charges, reduce the level and incidence of direct private costs; and under some circumstances, they can more directly alleviate the income constraints of poorer households.” (Colclough et. al., 2003) 1 . 1  It is important to note that the theory and discourse on trends in development assistance, aid effectiveness and their relationship with outcomes of primary education is informed by and focused particularly upon Sub-Saharan Africa. Given the differences in demographics, culture, religion, politics and economics between South Asia and countries in SSA, all lessons need to be incorporated with some caution. Having said that, the purpose of this literature review is to focus primarily on issues rather than results. 2  Developing country governments spend absolutely (and sometimes proportionately - relative to GNP) less on education than those in developed countries. Lack of adequate financing is an important hurdle for achieving education sector targets. The issue of resource availability underlies the development assistance debate. There is the question of whether or not developing countries have enough resources or the requisite resource generating capability to meet the gap. On the other hand, lack of  political commitment and conflicting priorities result in misallocation of existing resources. International development discourse and policy development has addressed both. The World Education Conference at Dakar in 2000 in addition to setting international goals for the education sectors in the developing countries also firmly established the commitment by the international community not to allow lack of resources to stand in the way of achieving set goals. Subsequently, aid was tied to policy initiatives to encourage the fiscal arrangements required to ensure governments spent enough and in the right place to meet international education targets. The constitution of Pakistan treats primary education as a right conditioned by the availability of resources. Article 37 of the Principles of Policy, asserts that ‘the state shall remove illiteracy and provide free and compulsory secondary education within minimum possible period’. Thus the responsibility to  provide free and compulsory education, conditional though it might be, falls on the public sector. The government is also signatory to the UN Convention on Child’s Rights 1989, the MDG and EFA goals. Ensuring adequate levels of public spending for the education sector is part of the commitments. Despite these commitments public spending on education in Pakistan has always been low. Resource allocation to the sector has declined from 3 per cent of GDP in 1990 to 2 per cent in 2004 (WDI, 2006). In Pakistan, there is a particular need to focus on public sector supply-side issues- adequacy, efficiency and levels of financing. In theory, systems of educational finance are judged on whether they lead to an adequate, efficient and equitable provision of educational services (Benson, 1995).  Adequacy: Adequacy of resource allocation is one criterion for judging systems of educational finance. In terms of resources, adequacy is traditionally defined in terms of the portion of GNP allocated to education and the share of central government’s budget spent on education. Since the 1970s the adequacy measures have become more concerned with output targets rather than expenditure targets.  Now found on the list of adequacy criteria are variables such as the proportion of relevant age group enrolled in primary schools, gender differentials in enrolment, secondary as well as primary school enrolments and adult literacy rates. In addition, to ensure universal enrolment, sufficient retention and quality of instruction, the balance of teacher supply as between urban and rural areas is important. The objectives also require commitment on the part of the teachers. Hence levels of public financing should  be adequate enough to ensure these criteria are met. A recent study by the Ministry of Education, Pakistan has acknowledged that if EFA goals were to be met, budgetary allocation to the education sector would need to be raised to 4per cent of GDP (GoP, 2003). Cost Effectiveness:  The other issue is how effectively the money is spent. Central governments need, through adjusting expenditures, to ensure the efficiency of local policy (Benson, 1995). Efficiency 3  is usually judged in terms of cost effectiveness. Cost effectiveness refers to the yield of educational outputs relative to consumption of real resources by educational institutions. Benson stresses the importance of judging how efforts to raise cost effectiveness are reflected in the government’s financial  policy. Indications of lapses from an acceptable standard of efficiency include a) excessive rate of student wastage, b) excessive rate of repetition and c) high rate of student failure. The government can address these problems using financial incentives but requires good management information systems and freedom from political influence. Pasha et al. (1994) examine cost effectiveness of the primary education sector in Pakistan and conclude that the increasing trends in costs are explained by recurring teacher costs, school construction costs and a cost ineffective utilisation of existing resources (human and infrastructure). They argue that, given that the number of teachers is substantially below the optimal level, a shift in allocation of funds from construction to teacher employment will increase cost effectiveness. The resource gap  There is general agreement on the view that developing countries continue to need external financial and technical assistance. The amount and nature of assistance is a country-specific question. Colclough with Lewin (1993), using country-specific data, estimated that an additional US$2.5bn per year (1990 prices) would be needed to enrol all primary-aged children in school by the year 2005. Subsequent estimates, using a similar methodology, have been prepared, with the latest versions indicating that an additional US$10bn of aid (2005 prices) is now likely to be required each year to 2015, if EFA is to be achieved by that date. As to the costs in Pakistan, a study by the Ministry of Education calculates the total cost of providing physical infrastructure and technical inputs (teacher training and recurrent inputs) based on estimates of future total population of school going children (girls and boys) in rural and urban areas. The costs of improvements in the quality of education are also estimated by incorporating components of teachers training, curriculum development and improvements in examination systems and supervision. Projections of available budgetary resources are based on the current proportional allocation of GNP to the social sector as well as provincial allocations to education. The resulting financial gap is the difference between the estimated costs and projected resource availability. Table 1: Resource gap affecting the achievement of EFA targets for primary education, adult literacy and early childhood education  Net Enrollment in Primary education by 2015 17.536 million Cost of primary education provision for public sector (Rs. Million) Maintaining present participation rates 582,300 Financing additional students 373,271 Total Cost of Primary education provision for the public sector 955,571 Cost of achieving 86 per cent literacy rates 208,197 Cost of achieving 50 per cent participation rates for early childhood education 48,329 Total Cost of achieving EFA Objectives by 2015/16 1,212,097 4
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