The evaluation of the Nicaragua’s reform has been underway since 1995, undertaken by a team of the Ministry of Education and the World Bank’s Research Group, and has produced a number of special school-household surveys and informal assessments<sup>29</sup> which have allowed a continuous monitoring of the reform in time, constituting, as such, a unique case in Latin America. In 1998, King and Ozler (1998), building on these past assessments and data collection, attempted to undertake a particularly thorough evaluation by estimating an expanded education production function which allows for the estimation of the impact of decentralization by comparing autonomous schools with non-autonomous and private schools<sup>30</sup> . Their study finds that school management, measured by the degree of autonomy of the school, is an important determinant of student performance and, more specifically, disaggregating the school autonomy measure, that schools that take more decisions on teacher management (hiring and firing of teachers, evaluation, supervision, training, etc) are likely to be more successful in increasing student achievement<sup>31</sup> .

A similarly thorough evaluation was also made of the El Salvador’s EDUCO model in 1998 by Jimenez and Sawada (1998) and in 2004 by Sawada and Ragatz (2004). The first thing to say is that there is clear evidence that EDUCO, which was firstly conceived as a way to expand educational access in the rural areas, was successful in doing so (starting from a much lower point in 1990, the gross and net enrolment rates are currently higher in the rural than in the urban area in El Salvador [NER: 100% and GER: 132%] and we know that EDUCO schools were the main enrolment driving force in the rural area in the 1990’s). Taking this as a basis, the first study, estimating expanded education production functions which use three measures of educational achievement<sup>32</sup> and allowing the estimation of the impact of school autonomy by comparing EDUCO with traditional rural schools<sup>33</sup> , attempts to explore if this expansion came at the expense of learning. It finds that, not only educational achievement is not any lower in EDUCO than in traditional schools (which is good since students in EDUCO are usually from the most disadvantaged backgrounds), but that students in EDUCO schools miss less school days due to teacher absences than traditional school students. The second study, estimating the first and second-order effects of EDUCO schools through regression analysis and controlling for sample selection and unobservable bias when measuring the impact of EDUCO vs. traditional schools, finds that EDUCO teachers have more motivation, as measured by spending more time meeting with parents and other school members, being absent less and dedicating more time to teaching, and that this increased motivation has a positive impact on student performance.

Looking at these results, two points that come to mind is that school autonomy, at least in certain functional areas, seems to be a very promising reform, and that this reform, to be effective, should be accompanied by both a strong, well-designed “compact” relationship between the center and the schools (the supervisory system put in place in El Salvador is an example of what might be 29 See Nicaragua Reform Evaluation Team (1996), Fuller and Rivarola (1998) and King, Ozler and Rawlings (1999).

30 The model, which covers almost 2,000 students in about 90 schools at the primary and secondary level in 1996, also allows for non-random selection of schools into the decentralization reform (schools, at least in the first stage of the reform, were generally either chosen by the MOE or convinced to volunteer and, as such, cannot be considered entirely random) and corrects for sample attrition.

31 At the primary level, were each school to increase its real decision-making power by one standard deviation (i.e. approximately by 20% more decisions) the average math score would increase by 6.7%: this effect size is twice as large as that of textbooks, 1.5 times that of teacher’s education and 1.4 times that of a one-standard-deviation reduction in class size.

32 Standardized tests in Spanish and math and school-days missed by a student due to teacher absence. 33 The model, which covers 192 schools and 897 students in 1996, also corrects for endogenous selection of schools by the parents.

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