Education policy has recently focused on improving accountability and incentives of public providers for actual learning outcomes, often with school-based rewards programs for high performers. The Learning Guarantee Programme in Karnataka, India, is prominent among such efforts, providing cash transfers to government schools that achieve learning at specified high levels. This study examines whether schools that self-selected into the incentive program are different than those that did not. The answer has important implications for how to evaluate the impact of such a program. Although we find no significant differences in resources and characteristics, we do find significant and substantial differences in test scores prior to selection into the program, with better performing schools more likely to opt-in. These findings also provide insight into how incentive-based programs that focus on levels of (rather than changes in) achievement can exacerbate inequality in education. Failing schools, since they are more likely to opt-out of incentive programs, are likely to require other targeted programs in order to improve. In addition, our findings reinforce the value of randomized controlled trials to evaluate incentive programs since evaluations that rely on matching schools based on resources (if, for instance, pre-program test scores are unavailable) will be biased if resources poorly predict test scores.
Journal of Development Studies
April 01, 2007