Equity of Financingand

Financing for Equity

The best fit of financing to a more equitable education system

Péter Radóeducational policy specialist

senior consultant, Expanzió Consulting Ltd.

Equity

in

Education

Socio-economic status

Residential status

Ethnicity, mother tongue

Gender

Impaired personal abilities

The institutional operation of schools

Teaching

Leraning

Progression and perticipation

(enrollment rates, early school leaving, droput, dead end tracks, etc.)

Learning outcomes

(low competenciy levels in key competency

areas)

The dimensions of education relevant

social disadvantagesThe way how education service providers work

The various forms of school failure

E q u a l C h a n c e s E q u i t y

Financing

for Equity

Two competing basic principles

Categorical equity: unit cost (standardized inputs) are emphasized andequalized (the traditional access-oriented framework)

Fiscal neutrality: learning outcomes and choice are emphasized, inputsare adjusted (financial argument for decentralization)

Key

systemic

factors

GovernanceThe systemicenvironmentthat determines thelatitude for schooloperations

The quality ofteaching and schools

School SystemCharacteristicsExternal challengeswith high impact on theschool system

Allocation of financial resurces

Governance / management

Curriculum and standards

Initial teacher training

Information system Research &

Development

Textbooks and teaching materials

Schools

Curriculum and standards

Quality evaluationProfessional

services

Demographic trends and their impact

New technologies (digital natives in the schools)

Fragmentation of learning pathways

External social pressure (social and ethnic

stratification)

Changing expectations → weakening relevance

Equity

context

• The magnitude of school failure in Serbia: more than fifth of students do not reach secondary enrollment, nine out of ten Roma children do not complete primary, more than half of the 15 years olds are functional illiterates = education gets rid of the most „problematic” children and offer poor average quality to the rest.

• Large inequities and poor average quality is caused buy the combined effect of the failure of schools and governance failures

• Distinction between medium- and long-term policy objectives.

– Medium-term: improving participation (increased enrollment, decreased dropout and early school leaving)

– Long term: improving learning outcomes (reduced learning failures)

• Primary objective: enabling schools to respond to equity challenges by placing them to the appropriate systemic environment and by empowering them with the necessary pedagogical and institutional capacities

Policy

context

Overcoming governance failures• Making school failures visible, strengthening professional

accountability

• Generating vested interests for avoiding school failure

• Making easily accessible professional support to schools and children available

• Extending the scope of professional, organizational and financial autonomy of schools

• Effective anti-discrimination measures, strengthening legal accountability

Acculturation of schools (teaching + school operations)

• Making teaching more differentiated

• Providing individualized supplementary support (drop-out prevention, inclusion)

• Adjusting school operations to the problems to be solved (self-evaluation based school improvement)

The potential of normative financingThe decline of dropout in primary education in Hungary after

introducing per capita financing in 1991.

School year Completion rate Number of school leavers without

completed primary

1990/91 92,9 10300

1991/92 93,5 12400

1992/93 94,5 10000

1993/94 96,1 6800

1994/95 96,0 6600

1995/96 96,8 5000

1996/97 96,5 5200

1997/98 95,2 5000

1998/99 96,2 5200

1999/00 97,5 5000

How can be the vested interest of schools in full enrollment created?

• Per capita based financial allocation

+ Setting hard budgetary constraints (it’s not automatically flows from normative financing!)

+ Perpetual adjustment of the capacities to the declining number of students enrolled (= local ownership instead of brainless central school network rationalization campaigns)

→ Two layers financial allocation system

Financial relationships at two levelsCentral financingTechnically easy automatism that

ensures minimum level efficiency

+ allows for flexible local financing

regimes with revenue sharing +

allows for using financing as policy

instrument

Local financingBy balancing incomes and cost

harmonizes the distinct logic of

central financing and school level

planning + allows space for

adjusting to the diversity of local

and school level diversity of

educational needsSchools

School owners

State budget

Financing of school owners

(per capita based allocation with supplementary

incentives)

Financing of schools(on the basis of number of classes and the tasks that

schools perform)

Summarry

Financing for mainstreaming

Centralized financing on a historical basis: schools are financed regardless of the task they perform (→ pupils with specific needs are taught in separate schools)

Decentralized financing on the basis of categorical equity: emphasis of fairness of allocation ↔integration is financed but not inclusion → no space for ensuring fairness of outcomes

Decentralized financing on the basis of fiscal neutrality: mainstreaming is financed = integration + differentiation + individualized supplementary support

An

example

The evolution of Roma educational policies• „Paper based” demonstration policies

– Success reports for the international community– Financing: long list of small-scale grass-root projects

mainly funded by the donor agencies

• „Ghettoized” policies– Roma education strategies or medium-term working plans

(compilations)– Financing: set-aside for small grants + scholarship

schemes + limited resources for development

• „Mainstreamed” policies– Operationalization and implementation of mainstream

strategies– Financing:

• Roma education is a „horizontal goal”• Funding is incorporated to the normal allocation

system (i.e. incentives)• Direct costs of development