Page 16 Laat et al. 2008). However, in Uttar Pradesh in India, neither informing communities about the quality of local schools, what they should expect from schools, local funding for schools, and the responsibilities of Village Education Committees (VECs), nor training communities and VECs in techniques for monitoring schools and assessing their children‟s progress, had any impact on school performance (Banerjee et al. 2009).

# **II.b. Accountability in the School “Production Function”**

52. Students‟ performance, and consequently school performance, can be measured on the basis of many different outcomes, e.g. students‟ average test scores, repetition rates, drop-out rates etc. Thus, the _education production function_ can take the form 53. where _qij_ is the performance of school _i_ in terms of output _j_ , and _xi_ represents the level of educational resources, _i.e._ school and teachers‟ characteristics, available in school _i_ . The set of accountability efforts made in school _i_ can be divided into two components: _a1i_ captures the **_topdown_** accountability efforts exercised by educational office inspectors and school director as well as transparency in school administration; and _a2i_ refers to the **_parental and local community participation_** in holding school director and teachers to account, as well as parents‟ general involvement in their children education; _zij_ comprises attributes of the students‟ parents and community. Finally, the term _ηij_ is a random error, which may includes school, community and household unobservable characteristics.

54. However, a note of caution is needed. This investigation into school performance in Albania also employs retrospective data and is therefore not exempt from possible biases due to omitted variables and endogeneity. Nevertheless, the richness of the new data from the Albania School Stakeholder Survey is unique, and allows researchers to investigate the relationship between school outcomes and: (1) school physical and human resources; (2) top-down accountability and transparency; (3) participatory accountability institutions and parental involvement; (4) parents‟ and community characteristics.

55. Since the data are retrospective in nature, establishing causal links is problematic due to omitted variables bias and possible endogeneity of school resources, parental characteristics and accountability measures. Fully addressing endogeneity problems is virtually impossible given the retrospective nature of the data. Indeed the Albania School Stakeholder Survey is intended first and foremost as a baseline to measure the impact of interventions the Government is still considering. That said, by employing fixed effects at the level of the Regional Educational District (RED) and clustering the error terms by district, the problems of endogeneity of school resources and top-down accountability measures can be attenuated (although not entirely eliminated).<sup>18</sup> As for the potential endogeneity of parental involvement, this is likely to be especially severe if parents have a choice in determining which school to enroll their children. In Albania this seems to be the case only in large urban areas.<sup>19</sup> Nevertheless, it is a reason for concern.<sup>20</sup>

> 18 The REDs are local education administration entities (thirteen in total) that are most directly accountable to The Ministry of Education and Science (MoES). While the MoES is directly responsible for the development of curricula, the selection of textbooks, the structure of the academic year, the workload of teachers, the allocation of resources among local education institutions, and teacher training (World Bank, 2005), the RED are responsible for the delivery of primary and secondary education in their respective districts –  37 in total.

> 19 When asked why they chose that specific school to enroll their children, 88% of parents in rural areas point to the vicinity to their house, and 12% mention the presence of good teachers as a reason. These percentages change to 65% and 35% respectively in urban areas.