The purpose of the paper is to identify and analyze the effects of budget expenditures (operation, salary, and investment) on the completion rate of primary education. The annual education budgetary data from 1970 to 2013 collected in Burkina Faso were used to estimate a parametric education production function. The results show a positive effect of unitary investment expenditure and a negative effect of unit staff salaries and budgetary instabilities. Pay mechanisms in public administration should be redesigned to reward proven performance and skills. Moreover, the control of budget programming would lead to better results in the education sector .
The effect of inflow resources in the education sector and the results obtained in the sector have been a permanent concern in developing countries. Indeed, it is commonly observed that important resources are made available to the education sector that do not generate tangible results. In fact, the results obtained in the education sector regarding mobilized financial resources are mixed [
Sub-Saharan Africa spent 4.1% of its GDP and 16.9% of the total public expenditure on education, with a completion rate of 59% [
An education production function is generally used to understand the relationship between resources and academic achievement. The inputs are usually a combination of education and financial variables. The overall budget of the education sector or the total expenditure per student is the commonly used financial variable. Budget expenditures are capital expenditures and operating expenses. In addition, operating expenses are subdivided into strict salary and operating expenses. Schools operate in a political environment that is almost always defined by governments that set programs, fund schools, regulate labor laws, and set rules for certification and the hiring of teachers. The analysis of the effects of expenditures on educational outcomes would be consistent in the relationship between public budget expenditure categories and educational outcomes at the national level. Since the educational process is cumulative, the primary completion rate is the indicator to consider. Completion of primary education is a prerequisite for sustainable literacy [
This study is part of the empirical research on the effect of public budget spending on educational outcomes in Burkina Faso. Few studies in Burkina Faso have analyzed the effect of financial resources on educational outcomes in Burkina Faso. Except the study by [
The article is organized as follows. Section 2 presents a brief literature review. Section 3 provides descriptive statistics of public expenditures in primary education. Section 4 outlines the methodology used in the study. Subsequently, Section 5 presents the empirical results of the research, while Section 6 provides a discussion of the results. The last section concludes the study.
The unexpected results found regarding the role of educational resources on student performance [
As stated above, few studies in Burkina Faso have analyzed the effect of financial resources on educational outcomes. Most research has performed a comparative statistical description of the evolution of educational outcomes and mobilized financial resources [
Authors | Countries | Empirical Method | Results |
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Hanushek and Woessmann [ | World Program for International Student Assessment (PISA) testing math, science, and reading | Least-squares regressions with instrumental variables in quasi-experimental research methods | Class size is a relevant variable only in settings with low teacher quality. |
Teachers are more closely related to student outcomes. | |||
Ouédraogo [ | Burkina Faso | Ordinary least squares (OLS) in the error correction model | Positive effect of student-teacher ratio. |
Short-term negative and long-term positive effect of percentage of qualified teachers. | |||
Long-term negative effect of overall repetition rate. | |||
Not significant in the short- and long-term positive effect on the literacy rate. | |||
Negative effect of unit costs of budgetary public expenditure. | |||
Positive effect in the short- and long-term total operating expenditure. | |||
Positive effect of salary unit expenditure. | |||
Positive effect of unit investment expenditure. | |||
Al-Samarrai [ | UNESCO countries | OLS | Expenditure per pupil in primary school has a positive significant effect on the survival rate only up to Grade 5 and a negative significant effect on school enrollment rates. The other coefficients are not significant. |
Hanushek and Kimko [ | Countries of the International Association for the Evaluation of Educational Achievement (IEA) and International Assessment of Educational Progress (IAEP) | OLS | Student-teacher ratio is not significant. |
Ordinary spending on education per student has a negative effect. | |||
Total expenditure on education in percent of GDP has a negative effect. | |||
Wößmann [ | United States of America, developing countries, OECD countries, East Asian countries | Weighted least squares | International differences in student performance are not caused by differences in schooling resources but are mainly due to differences in educational institutions. Class size has a positive effect. |
Lee and Barro [ | Ten countries of the Middle East/North Africa, 23 countries of Sub-Saharan Africa, 23 countries of Latin America/Caribbean, 10 countries of East Asia/Pacific, 7 countries of South Asia, 23 OECD countries, 9 countries that formerly and centrally planned economics | OLS | Pupil-teacher ratio has a significant negative effect on scores in math, science, and language. |
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Average treatment of teachers has a significant positive effect on test scores. | |||
Ordinary expenditure of education per student is insignificant. | |||
McMahon [ | World and regional (Africa, Latin America, Asia, and OECD) | OLS | Ordinary public expenditure on primary education in percent of GNP has a significant positive effect on gross enrollment rates of boys and girls in primary school Grade 5 and the completion rate for boys and girls. |
Ordinary public expenditure per elementary student has a significant negative effect. | |||
Gupta et al. [ | Sub-Saharan Africa, Asia Latin America, Caribbean transition countries | OLS and two-stage squares (2SLS) | Education spending on primary and secondary education (as a percent of total education expenditure) has a significant positive effect on the gross enrollment rates in primary and secondary education, retention in 4th year of studies. |
Education expenditure (in percent of GDP) has a positive and significant effect only on the secondary school enrollment rate; Effects on the other two variables are not significant. | |||
Schultz [ | Ghana, Côte d’Ivoire, Kenya and South Africa, Nigeria, and Burkina Faso | OLS | Remuneration of public teachers (in percent of GNP per active-age adult) has a negative effect. |
Colclough and Lewin [ | China, Sri Lanka, Zimbabwe, Colombia, Ghana, and Senegal | OLS | Ordinary public expenditures on primary education (in percent of GNP) have an insignificant effect. |
Ordinary public expenditures per elementary student (in percent of GDP per capita) have a negative effect. |
expenditures on the completion rate of primary education from 1970 to 2009 and found that the unit salary and investment costs of the Ministry of Education positively influence the completion rate of primary education with the respective elasticities of 0.366 and 0.018. Dependent variables in this study were the GDP per capita to proxy individual wealth, education variables, investment expenditure, operating expenditure, and wage expenditure. Schultz [
Difficulties of assessing the effect of resources on educational outcomes are related to methodological problems [
The education production function approach is more microeconomic. Yet, current applications and interpretations go beyond this theoretical framework. In addition, the use of scores tests does not integrate the cumulative process of education. Moreover, budgeted public expenditures are rarely used in analysis of the effects of educational resources on educational outcomes, while the budget remains the main tool for the government education policy. The production function is an alternative education policy evaluation and an assessment of the effectiveness and efficiency of public service delivery education. Budgetary public expenditures in education are either operating expenses, salaries, or investments and equipment. The effects of these expenditures on educational outcomes could be differentiated according to these items.
Most of salary expenditures consist of teacher payments. It is usually stipulated that the completion of primary education is hindered by the high costs of teacher salaries and generally, by the costs of operating expenses [
Public effort for education in Burkina Faso shows an increase in public resources allocated to this sector. Budget allocations for education reached 5.46% of the GDP in 2014 against 0.83% in 1970. Thus, Burkina Faso is within the average of African countries in terms of the resources allocated to education today.
The effectiveness of the transformation of resources into educational outcomes is seen through expenditures carried out under the implicit assumption that resources provided for education were effectively devoted to the latter regarding the rules and principles of budget execution and control.
The positive trend of internal indicators of primary education during the period 1970-2013 is accompanied by an increase in expenditure per student. In fact, the expenditure per pupil has risen from 9795 FCFA1 to 46,567 FCFA
11 Franc CFA = 0.00152449 euros (fixed rate).
Libellés | 1970 | 1980 | 1990 | 2000 | 2010 | 2013 |
---|---|---|---|---|---|---|
Unit salary expenditure | 0.372 | 0.305 | 0.187 | 0.150 | 0.125 | 0.048 |
Unit operating expenditure | 0.037 | 0.065 | 0.006 | 0.029 | 0.024 | 0.058 |
Unit investment expenditure | 0.003 | 0.009 | 0.007 | 0.012 | 0.039 | 0.047 |
Unit costs | 0.412 | 0.379 | 0.200 | 0.191 | 0.188 | 0.152 |
Source: Statistical yearbooks of primary education and financial regulation.
between 1970 and 2013. It has increased more than 4.75 times in 44 years, with an average annual growth rate of 3.60%. However, the primary completion rate rose from 4.46% to 57.6% during the same period. The increase in spending per student would be due to the growth of wealth of the country. Income growth would lead to individual earnings and, as a result, a general increase in the remuneration of educational staff, which accounts for more than 60% of unit expenditure.
The steady increase in budgeted public expenditure per pupil remains a concern in view of the population growth and education objectives, as well as Burkina Faso’s financial capacities. Strong growth is seen in the level of investment expenditure per student, although a large part of the budget is devoted to salary expenses.
Moreover, the decline in unit costs seems to reflect the option of reducing operating expenses, especially salaries, in favor of capital expenditures in line with the work of [
However, the level of student achievement is influenced by the skills of the teachers. The presence of qualified teachers in the educational system leads to an increase in salary expenditure, regarding the system of remuneration of state agents and especially for teaching quality. Teacher remuneration is an important incentive that can influence both the quality of teaching and the motivation of teachers, as well as the dynamics of education indicators. The devaluation of the status of teachers compared to that of other professional groups and factors, such as mismanagement, reduced teaching time, and weak controls and follow-up, explain the apparent lack of effect of the steady increase in per-student expenditures on school results [
Carrying out reform in the primary education without having knowledge of
the type of causal relationship that exists between state expenditure and the Primary Completion Rate could result in ineffective and wasteful changes.
For the econometric estimations, an education production function will be used. According to Glewwe and Kremer [
A = a ( S , Q , C , H , I ) (1)
where A stands for knowledge acquired schooling, S is schooling, Q is a vector of school inputs and teacher characteristics, C is the vectors of student characteristics, including inherited skills, H is vectors of household characteristics, and I is the vector of school inputs under the control of parents (school frequency, acquisition of textbooks, etc.). Used both at the micro and macroeconomic levels after transformation, the education production function is more of an empirical approach to the educational production process than a genuine theoretical framework for study [
The empirical analysis of the relationship between education expenditures and outcomes is portrayed by the following equation:
Y = f ( X , W , Z ) + μ (2)
where Y is the education output (primary completion rate or gross enrollment ratio or score tests); X denotes the education expenditure (unit expenditure or share of GDP allocated to education); W represents school characteristics (pupil-teacher ratio, teachers’ level of education, teachers’ experience, class size, and peer group); Z indicates the family characteristics (parents’ level of education, number of household members, family income, and family location); and μ is the error term.
Our research is conducted at the macroeconomic level. The data are annual education budget data. Data on family characteristics are unavailable. Since the data are essentially those related to the financial dimension of the analysis, the model (2) must be adapted to take this constraint into account. This gives the following:
Y t = f ( X i t , β ) + ε t (3)
where Yt stands for the completion rate of primary education at time t; Xit denotes the budget variables (operating budget, salary, and investment expenditures of the Ministry of Education); β is the column vector of unknown coefficients of the estimated parameters, and εt indicates the error terms. Variables and data sources are presented in Section 4.2.
Along with the endogenous variable and the primary completion rate, the variables used in this study for estimations are financial variables related to government expenditures that can influence educational outcomes. The primary completion rate per cohort is an indirect measure of the completion of primary education. Centered on children who have access to school, it measures the proportion of those who completed their schooling successfully. It is the product of the survival rate in the last year of primary education and the percentage of final-year students who obtain the corresponding degree. A pupil who completed his primary education can read and write. As a result, the completion of primary education forms the basis of sustainable literacy and the foundations of secondary and tertiary instruction. The primary completion rate (PCR) should progress in the same direction as the budget of the Ministry of Education.
The exogenous variables are the unit operating expenditures, unit expenditures for salaries, and unit investment expenditures. Operating expenditures are dedicated for the functioning of the Ministry of Education and its related services. The current amount is divided by the number of pupils and the GDP per capita of the same year. The expected sign of this variable is negative because operation activities are mainly administrative. Unit salary expenditure is the total amount of staff salaries, including those of the teachers, divided by the number of pupils in the year and the GDP per capita of the same year. The expected effect is positive because investment expenditures are the part of the education budget used for the construction of infrastructure and the acquisition of specific equipment or materials. The total amount is divided by the number of pupils and the GDP per capita of the same year. The expected effect is positive.
The data comprise the annual education budgetary data covering the period 1970 to 2013. The change from the budgeting process of the object budget to the program budget as of 2014 at the national level makes the budget expenditure data executed unavailable from 2014 to 2017. They are collected from national institutions in charge of education and public finances, including the state budget. The estimation techniques are presented in the next section.
The augmented Dickey?Fuller (ADF) test, Philipps-Perron (PP) test, and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) tests were applied to test for the existence of unit roots. In addition, p, the optimal lag length, is determined by the Aikaike or Schwarz and Hannan-Quinn information criterion. The estimations give an optimal lag of 1. The results of unit root tests are displayed in
Since the stationary test revealed the existence of variables integrated at the order of 1 and others that are stationary at the level, the presence of a long-term relationship between the series must be tested. The Johansen-Juselius test is performed. The results in
Section 5.3 presents the different tests for assessing the quality of the model.
In addition to these two tests, we conducted quality assessment tests of the model. The results of the various quality tests of the models show that the coefficients are individually different from zero and are all significant at the 5% level. The
Variables | Test ADF (trend + constant) | Test PP (trend + constant) | Test KPSS (trend + constant) | |
---|---|---|---|---|
Level | First Difference | Level | Level | |
PCR | −3.597* | −3.597* | 0.739* | |
Investment | −3.597* | −3.601* | 0.739* | |
Opex | −4.205* | −4.192* | 0.739* | |
Salary | −2.607*** | −2.621* | 0.739* |
*, ** and *** denote significance level at 1%, 5%, and 10%, respectively. Source: Author based on collected data.
Trace | Maximum Eigenvalue | |||
---|---|---|---|---|
Rank | Trace Stat | CV at 5% | Maximum Eigenvalue | CV at 5% |
r = 0 | 47.030 | 47.856 | 20.871 | 27.584 |
r ≤ 1 | 26.159 | 29.797 | 16.365 | 21.132 |
r ≤ 2 | 9.795 | 15.495 | 8.646 | 14.265 |
r ≤ 3 | 1.149 | 3.841 | 1.1492 | 3.841 |
Source: Author based on collected data.
coefficients of the variables explain the model because the probability of the Fischer statistic is equal to zero. The errors follow a normal law. The Breusch-Godfrey test of the Lagrange Multiplier on Errors and the Conditional Autogression Test of Heteroscedasticity (ARCH) errors indicate that they are not correlated and are homoscedastic. The Ramsey test shows that the model is well specified, and the cumulative sum control chart (CUSUM) test reveals that the model is structurally unstable, as its representative curve is located outside the corridor at the 5% significance level in 2004. The square CUSUM test indicates a cyclical instability of the model at the 5% level in 1990-2008. This leads to introducing a dummy variable (dum) in the model to be estimated to portray the budget instability, where dum = 1 for years 1990 and 2008, and dum = 0 elsewhere. Considering this, the model to be estimated is as follows:
p c r t = β 0 + β 1 o p e x t + β 2 i n v e s t t + β 3 s a l a r y t + β 4 d u m + γ t
The estimation of this model gives the results presented and discussed in Section 6.
In view of the results of the various specification tests, an OLS procedure is adopted to conduct econometric analyses. Also, the unavailability of disaggregated data of budget expenditures executed in municipalities in Burkina Faso does not allow for estimation analysis in panel data. The results of the estimation are presented in
The negative effect of salary treatment on the completion rate of primary education could be explained by various factors. In Burkina Faso, there are many substitute teachers in urban areas who, while contributing to the increase of the wage bill in the education sector, have a low participation in the production of education services. In addition, it should be noted that the wage bill for education includes the salaries of administrative or clerical staff. Beyond these elements, the phenomenon of teacher absenteeism and the non-implementation of
Variable | Coefficient | Std. Error | t-Statistic | Prob. |
---|---|---|---|---|
C | 0.589* | 0.054 | 10.825 | 0.000 |
Operating Expenditure (opex) | 0.208 | 0.727 | 0.286 | 0.776 |
Unit Investment (invest) | 0.6514 | 0.453 | 1.438 | 0.159 |
Unit Salary (salary) | −1.983* | 0.701 | −2.828 | 0.007 |
DUM | −0.055*** | 0.028 | −2.006 | 0.052 |
R-squared | 0.831 | Mean dependent variable | 0.223 | |
Adjusted R-squared | 0.814 | SD dependent variable | 0.155 | |
S.E. of regression | 0.067 | Akaike info criterion | −2.468 | |
Sum squared resid | 0.174 | Schwarz criterion | −2.265 | |
Log likelihood | 59.298 | Hannan-Quinn criterion | −2.393 | |
F-statistic | 47.974 | Durbin-Watson stat | 0.691 | |
Prob (F-statistic) | 0.000 |
*, ** and *** denote significance level at 1%, 5%, and 10%, respectively. Source: Author based on collected data.
the total number of hours assigned to teachers greatly contribute to reducing the productivity of education. Moreover, many teachers are assigned to tasks other than teaching and are always paid by the budget of the Ministry of Education. This poses the unfairness of the use of teachers and the lack of a reward system based on actual professional performance.
The instability of budget execution has a negative and significant effect on the completion rate of primary education. A 1% increase in budget instability decreases the primary school completion rate by 0.0552%.
In the light of all the above, what conclusions have been drawn?
This study aimed to identify and analyze the effects of budgetary expenditures on the completion rate of primary education in Burkina Faso. The OSL procedure revealed that constant increase in public budget expenditure of the Ministry of National Education and Literacy yields modest progress in the completion rate of primary education in Burkina Faso. The results indicate that investment expenditures and operating expenditures have no significant effect on the completion rate of primary education in Burkina Faso. However, these results suggest that wage expenditures and budget instability have a significant negative influence on the primary completion rate.
From a policy perspective, the results highlight the importance of the fact that the teacher remuneration structure must be based on productivity with a financial incentive policy. Since salary is a response to the merits and efforts provided, remuneration should be indexed on productivity and the obtained results. Given the fact that investment has no significant effect on the primary completion rate, the investment process needs to be transformed into a genuine investment strategy that ensures the effectiveness of the investments made so that resources spent are used for activities for which they are intended. For school buildings and equipment, flexibility needs to be introduced in budget execution (procurement). The involvement or empowerment of grassroots communities will be an asset.
I am very grateful to Professor Idrissa Ouedraogo, Economics Department, University Ouaga II, Ouagadougou, Burkina Faso, for his invaluable contribution to this paper.
Ouedraogo, S. (2018) Effects of State Expenditure on the Primary Completion Rate in Burkina Faso. Modern Economy, 9, 286-301. https://doi.org/10.4236/me.2018.92019