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Highlighted Session: Results Based Financing – Theory and practice of linking financing to results in education administrative management

Wed, April 20, 5:00 to 6:30pm CDT (5:00 to 6:30pm CDT), Hyatt Regency - Minneapolis, Nicollet D3

Group Submission Type: Highlighted Paper Session

Proposal

Results-based financing (RBF) has gained prominence within development aid and, more recently, within aid for education, as an approach to improving the effectiveness, efficiency and accountability of aid spending. A recent review of development projects identified that between 1993 and 2017, at least USD 25 billion of development spending was contingent on results within more than 300 RBF programmes. While the health sector has the highest number of projects utilising RBF, education and public administration are second and third.

RBF approaches are expected to have the potential for positive effects on education systems by incentivising specific stakeholders to achieve intended results. RBF is a financing arrangement where payments are contingent upon the achievement of predefined and subsequently verified results. This represents a fundamental change in development financing, a move away from providing funds for inputs and activities and towards tying payments to the achievement of measurable results – which could be outputs or programme outcomes. Experimentation with RBF within education has occurred in response to: 1) the recognition of a shortfall in funding from both international aid and national budget allocation; 2) limited progress towards SDG4; 3) the perception that traditional financing is inefficient, ineffective and prone to waste and corruption; and 4) a growing focus on increasing accountability towards achieving measurable results in terms of educational outcomes.

Furthermore, at the national level, RBF also represents a shift to Results-Based Management (RBM) of public services in the context of both operational and financial decentralization. The main drivers
for the introduction of RBM in the public sector are the funding agency’s need for a basis for allocating funds and desire to know what agencies are buying, a desire by elected officials
to hold the bureaucracy to account, the desire to encourage agencies to think about their
production function and efficiency, to link their outputs to impact, and to link service quality
to citizen needs (responsiveness).

Previous research on education systems in low-and middle-income countries has specifically identified that, in many instances, national governments have initiated RBF to incentivise sub-national actors (like district/provincial offices). Situated in the middle of the education value chain (the range of activities from start to finish to deliver services) sub-national education management actors play a crucial role in translating, transferring, brokering – and therefore in potentially disrupting and hindering – the gains sought by actors at other levels to ensure quality education service delivery. Thus, RBF directed at sub-national education management actors has the potential for cascading (rather than disconnecting) the effects of incentives at other levels of the education system value chain.

National policymakers have been utilising agencies at lower levels of governments to drive progress; however, theoretical RBF literature to date does not conceptualise this relationship and its potential outcomes. Current theoretical and empirical research leaves a gap in explaining the unique characteristics – linkage between levels – of the role sub-national education management actors play in education service delivery. This panel examines the lessons learned on the use of RBF to incentivise these actors to improve educational outcomes, while discussing theoretical and practical implications for education financing and RBF research.

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