randomized evaluation design. PEC is a major school-based management program launched in 2001 by the Mexican federal government to improve the quality of public schools in urban areas. In Colima, the state government enjoyed certain flexibility in the implementation of the intervention.

Our study contributes to the previous literature in two ways. First, the random allocation of PEC benefits to schools permits the unbiased identification of the effect of this SBM initiative on education outcomes. We can isolate the impact of PEC from that of other educational reform initiatives that may be simultaneously operating in the school. Second, the short- and mediumterm impacts of the program can be analyzed due to 12 years of information on the program in Colima and eight years of student test scores.

We take advantage of these factors to assess the short- and medium-term impacts of PEC over eight school years – from school year 2006-07 to school year 2012-13 – on school performance and student learning. More specifically, we follow a sample of 98 experimental primary schools where we have randomized the allocation of benefits. The present study follows two alternative strategies to identify the effects of PEC on test scores. The first compares treatment and control groups exogenously determined by a randomization. The second strategy exploits the differencein-difference approach to investigate the intensity of the treatment over time on test scores.

The comparison of means between Treatment and Control schools did not detect any impact of the intervention on learning outcomes. However, the difference-in-difference shows that the intensity of treatment increased test scores during the time of the intervention and after. The intuition behind these results is that the participating schools, control and treatment, were SBM schools before, during and after the intervention; a formal SBM intervention with a cash grant was not enough to improve learning outcomes in schools with regular SBM practices. However, the program has a heterogeneous impact on test scores conditional on the level of intensity-in terms of years participating in the program-of the treatment.

# **BACKGROUND AND RECENT TRENDS**

A small, well-connected state, with just two major urban centers, Colima has undoubtedly benefited from these characteristics in its efforts to improve educational outcomes. Within Mexico, the state of Colima has been a champion in building an efficient educational program to their specific educational development (De Hoyos et al. 2017). In 2006, a World Bank report (2006) analyzed the relationship between test scores and institutional reforms in Mexico at the state level. The report concluded that states with the best academic results are characterized by: state-wide examinations (including own assessment systems), decentralized decision-making to the local or school level, and campaigns to persuade teachers, teacher representatives (unions) and civil society of the necessity and effectiveness of their reforms. All these elements have been in operation in Colima since the late 1990s.

Colima ranks first among all Mexican states in the international achievement test, PISA, which is organized by the OECD. In many ways, this achievement is the culmination of a combination of both traditional and more innovative efforts to improve educational outcomes since the late 1990s.

4