nonetheless the absence of multiannual budgets does not facilitate the integrated financial planning of the implementation of the reform school financing is based on objective criteria number of students being the most important one but with adjustments for other factors which affect schools perstudent costs and not the result of negotiations between the government and school providers moreover the existence of a clearly defined and objectively measured formula as the basis for allocating resources imposes a hard budget constraint to providers and creates the conditions for basic spending discipline also by using the same formuladriven grants to finance public and private schools the system facilitated the growth of a diverse network of service providers and enabled a high degree of choice among households