Financing schools in the new South Africa

Comparative Education Review

Volumn 50, Issue 1, 2006, Pages 21-45

  Reschovsky, Andrew ^a  

^a NONE

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EID: 33644758511     PISSN: 00104086     EISSN: None     Source Type: Journal    
DOI: 10.1086/498327     Document Type: Article

References (84)

1. Some initial steps in the reform of education began (a) in the early 1980s, when the apartheid government increased investments in black schools and (b) in the late 1980s, when a small number of black students were enrolled in formerly all-white schools.
2. Between the early 1970s and the 1980s, four of these homelands - Bophutaswana, Ciskei, Transkei, and Venda - were converted into nominally "independent" republics, while the other six - Ganzankulu, KwaNdebele, KwaNgwane, KwaZulu, Lebowa, and Qwa-Qwa - were called "self-governing territories" by the apartheid government.
3. Education funding in the "independent" homelands came through allocations from the Minister of National Education, while funding for education in the "self-governing territories" came out of grants to the territories from the South African Department of Foreign Affairs; see Anne Case and Angus Deaton, "School Inputs and Educational Outcomes," Quarterly Journal of Economics 114, no. 3 (August 1999): 1047-84.
4. Johannes W. Fedderke, Rapael de Kadt, and John M. Luiz, "Uneducating South Africa: The Failure to Address the 1910-1993 Legacy," International Review of Education 46, nos. 3-4 (2000): 257-81.
5. See also Case and Deaton, "School Inputs and Educational Outcomes."
6. The sharp rise in black pupil-teacher ratios in the early 1950s is explained by the fact that black enrollment grew rapidly during that period while the growth rate of teachers in black schools remained unchanged. It was not until about 1970 that the growth rate of teachers outstripped the growth in black enrollment. See Fedderke, de Kadt, and Luiz, "Uneducating South Africa," 264-65.
7. The pupil-teacher ratio for colored and Asian pupils was equal to the black ratio in 1935. The ratio fell steadily over the next 60 years, although at no time was it lower than the white pupil-teacher ratio.
8. Case and Deaton, "School Inputs and Educational Outcomes";
9. Department of Education, Republic of South Africa, Brochure for the 2000 School Register of Needs Report (Pretoria: Department of Education, November 2001). Available at http://www.education.pwv.gov.za/content/documents/295.pdf.
10. Case and Deaton, "School Inputs and Educational Outcomes."
11. Department of Education, Republic of South Africa, Education for All (EFA) Assessment (Pretoria: Department of Education, March 2000). Available at http://www.education.pwv.gov.za/DoE_Sites/Quality_Assurance_Folder/ Educ_for_All_Assessment/EFA__Report.htm.
12. Eric A. Hanushek, "Interpreting Recent Research on Schooling in Developing Countries," World Bank Research Observer 10 (August 1995): 227-46.
13. For a criticism of Hanushek's analysis, see Michael R. Kremer, "Research on Schooling: What We Know and What We Don't - a Comment on Hanushek," World Bank Research Observer 10 (August 1995): 247-54.
14. Case and Deaton, "School Inputs and Educational Outcomes."
15. Johannes W. Fedderke and John M. Luiz, "Production of Educational Output: Time-Series Evidence from Socioeconomically Heterogeneous Populations - the Case of South Africa, 1927-1993," Economic Development and Cultural (Change 51, no. 1 (2002): 161-87.
16. The racial differences in education resources in South Africa as it emerged from the apartheid era were associated with extreme inequalities (a) in income and wealth (indicated by a Gini coefficient of the income distribution in 1993-94 of 0.59, a value that is higher than in all but five other countries in the world) and (b) in the United Nations' Human Development Index (HDI), which measures life expectancy at birth, adult literacy, and school enrollment as well as gross domestic product per capita (with the HDI in 1999 for white South Africans ranking about 22nd in the world and the HDI for black South Africans ranking about 104th). See United Nations Development Program (UNDP), Human Development Report 2001: Making New Technologies Work for Human Development (New York: Oxford University Press), 142, 183;
17. UNDP of South Africa, South Africa Human Development Report, 2003: The Challenge, of Sustainable Development in South Africa; Unlocking People's Creativity (Cape Town: Oxford University Press, 2003):
18. Statistics South Africa, Census in Brief: The People of South Africa, Population Census, 1996, Report no. 1-01-11, table 2.36 (Pretoria: Statistics South Africa, 1998).
19. Constitution of the Republic of South Africa, as adopted on May 8, 1996, amended on October 11, 1996, by the Constitutional Assembly, and amended by the Constitution of the Republic of South Africa Amendment Act of 1997 (Act no. 35).
20. Chap. 2, sec. 29 (1), of the Constitution of the Republic of South Africa, 14.
21. Chap. 13, sec. 228 (2)(a), of the Constitution of the Republic of South Africa, 127.
22. Based on tax collection data from 2000, I calculated that a 5 percent income tax surtax would have generated R310 per capita in Gauteng and R113 per capita in Western Cape but only R19 per capita in Eastern Cape and a mere R7 per capita in Limpopo. These calculations are based on revenue data from the P.A.Y.E. income tax between April 1999 and March 2000 provided by the South African Revenue Service and on 1999 provincial population estimates from Statistics South Africa.
23. Table Al of the appendix "Selected Indicators on Decentralization, Urbanization, and the Environment" of World Bank, 1999/2000 World Development Report (Washington, DC: World Bank, 1999), provides data for 52 countries throughout the world on the percentage of total government expenditures and tax revenues received by subnational governments. Defining the fiscal gap as the arithmetic difference between these two percentages indicates that South Africa's gap is not only larger than the gap in all 51 other countries but is in fact much larger than the country with the second largest gap.
24. Chap. 13, sec. 227(1)(a), of the Constitution of the Republic of South Africa, 126.
25. National Treasury, Republic of South Africa, Budget 2004 - National Budget Review, Annexure E (Pretoria: National Treasury, August 2004). Available at http://www.treasury.gov.za.
26. Beginning in 2004-5, the definition of school-age children used in the equitable share formula was expanded to include 5-year-olds, reflecting the fact that provinces became responsible for providing education during a reception year (grade R, equivalent to kindergarten).
27. The 1994 spending number is from UNICEF, "Girl's Education." Available at http://www.unicef.org/southafrica/education.html.
28. The 2003-4 data are from National Treasury, Republic of South Africa, Trends in Intergovernmental Finances, 2000/01-2006/07 (Pretoria: National Treasury, August 2004). Available at http://www.treasury.gov.za.
29. Servaas van der Berg, "Resource Shifts in South African Schools after the Political Transition," Development Southern Africa 18 (October 2001): 405-21.
30. Between fiscal years 1996 and 2004, per pupil education spending after adjusting for inflation actually declined in the Northern Cape and the Western Cape and grew by only 5 percent in Gauteng.
31. In South Africa pupil-teacher ratios are called learner-educator ratios. Because educators include nonteaching personnel, such as principals, average class sizes are generally larger than indicated by reported pupil-teacher ratios.
32. However, in 1998 this policy ended because of a court decision that the national Department of Education had no authority over the teacher-hiring decisions of local schools. See Edward B. Fiske and Helen F. Ladd, Elusive Equity: Education Reform in Post-apartheid South Africa (Washington, DC: Brookings Institution, 2004).
33. It was estimated that in 2000 41 percent of the public schools in South Africa had classroom shortages and an additional 50,000 classrooms were needed; see National Treasury, Republic of South Africa, Intergovernmental Fiscal Review, 2001 (Pretoria: National Treasury, October 2001). Available at http://www.treasury.gov.za. The data in table 2 also do not reflect substantial variations in class size within provinces attributable to national norms and standards that allow for smaller class sizes in certain specialized courses, including classes preparing students for the matriculation exams, which are found more frequently in schools catering to white students;
34. see Fiske and Ladd, Elusive Equity, 107.
35. Also, note that in South Africa pupil-teacher (or learner-educator) ratios include nonteaching personnel, such as principals; thus, average class sizes are generally larger than indicated by reported pupil-teacher ratios.
36. National Treasury, Republic of South Africa, Intergovernmental Fiscal Review, 2003 (Pretoria: National Treasury, October 2003), 35. Available at http://www.treasury.gov.za.
37. Department of Education, Republic of South Africa, National Norms and Standards for School Funding: Propos for Amendments, November 2004 (Pretoria: Department of Education, 2004),
38. also published in Republic of South Africa's Government Gazette 473, no. 27014 (November 19, 2004): 13.
39. The 1998 norms and standards required that within each province all schools in the poorest quintile receive 175 percent of the per student allocation to the middle quintile. The second poorest quintile received 125 percent, the fourth quintile 75 percent, and the richest quintile 25 percent of the average per student allocation; see Republic of South Africa, "National Norms and Standards for School Funding," General Notice 2362 of 1998, Government Gazette 400, no. 19347 (October 12, 1998).
40. For instance, in 2002-3, learner support material funding per learner averaged R70 in North West province and R71 in KwaZulu-Natal, compared to R235 in Mpumalanga; see National Treasury, Intergovernmental Fiscal Review, 2003, 66.
41. National Treasury, Intergovernmental Fiscal Review, 2003, 65-66.
42. Department of Education, National Norms and Standards for School Funding: Proposals for Amendments, 15. Under the proposed system, the Eastern Cape, a province with a high proportion of poor students, would place the schools attended by 34 percent of its students in the first (poorest) quintile, while schools attended by only 11 percent of its students would be assigned to the fifth (richest) quintile. Meanwhile, in the Western Cape, schools educating 4 percent of its student body would be placed in the first quintile, while schools attended by 40 percent of its students would be assigned to the top quintile.
43. Paul Glewwe, "Schools and Skills in Developing Countries: Education Policies and Socioeconomic Outcomes," Journal of Economic Literature 40, no. 2 (June 2002): 436-82. For example, in a study of 25 rural primary schools in Kenya that were randomly chosen from a group of 100 schools to receive a supply of textbooks, Glewwe, Kremer, and Moulin found no evidence that the presence of textbooks increased average test scores;
44. see Paul Glewwe, Michael Kremer, and Sylvie Moulin, "Textbooks and Test Scores: Evidence from a Prospective Evaluation in Kenya" (photocopy, Harvard University, Department of Economics, 2002). And, basing their finding on a study conducted in five sub-Saharan francophone countries, Frölich and Michaelowa reported that the presence of textbooks increases student performance primarily because of the "peer effects" from textbooks belonging to students' classmates;
45. see Markus Frölich and Katharina Michaelowa, "Peer Effects and Textbook in Primary Education: Evidence from Francophone Sub-Saharan Africa" (discussion paper, Hamburgisches Welt-Wirtschafts-Archiv, Hamburg, 2005).
46. Department of Education, National Norms and Standards: Proposals for Amendments, 16.
47. Ibid., 17.
48. Department of Education data indicate that in 2002, the latest year for which data are available, only 2.3 percent of primary and secondary school students attended private (i.e., independent) schools; see Department of Education, Republic of South Africa, Education Statistics in South Africa at a Glance in 2002 (Pretoria: Department of Education, December 2004), 4. In the eyes of the national Department of Education, another benefit of school fees, even when they are set at very low levels, is to "encourage parent participation in school governance, and promote accountability of schools to the communities they serve";
49. Department of Education, National Norms and Standards: Proposals for Amendments, 31.
50. Specifically, parents whose combined annual gross income is less than 10 times the annual school fee must be completely exempted from school fees, while parents whose incomes are between 10 and 30 times the annual fee are entitled to partial fee exemptions.
51. National Treasury, Intergovernmental Fiscal Review, 2003, 67.
52. Edward B. Fiske and Helen F. Ladd, "Balancing Public and Private Resources for Basic Education: School Fees in Post-apartheid South Africa, " in Education and Social Change in Post-apartheid South Africa, ed. Linda Chisholm (Cape Town: Zed Books, HSRC Press, 2004), 57-88.
53. van der Berg, "Resource Shifts in South African Schools," 407.
54. Fiske and Ladd, "Balancing Public and Private Resources," 75.
55. The average fees charged in formerly colored and formerly Indian schools were higher than the fees charged in formerly African schools but were substantially lower than fees in the formerly white schools; see Fiske and Ladd, ibid. "Balancing Public and Private Resources," 75.
56. See Fiske and Ladd, Elusive Equity, 90.
57. Fiske and Ladd, "Balancing Public and Private Resources," 66.
58. These enrollment data are based on an analysis of 262 schools in nine districts throughout Kenya. See UNESCO, "Challenges of Implementing Free Primary Education in Kenya: Assessment Report," Nairobi, March 2005.
59. These increases in enrollment were reported by ActionAid UK. Available at http://www.actionaid.org.uk/333/abolish_school_fees.html.
60. While UNDP data indicate that South Africa's net primary school enrollment rate was 88 percent in 1990-91, the Department of Education calculates that in 2002 essentially all children of primary school age were enrolled in school; see Department of Education, Education Statistics in South Africa at a Glance in 2002, 12, fig. 8;
61. UNDP, Human Development Report, 2004 (New York: Oxford University Press, 2004), 178.
62. Fiske and Ladd, "Balancing Public and Private Resources," 70.
63. Calculated from data in UNDP, Human Development Report, 2004, 178.
64. For example, see Jennifer Imazeki and Andrew Reschovsky, "School Finance Reform in Texas: A Never Ending Story?" in Helping Children Left Behind: State Aid and the Pursuit of Educational Equity, ed. John Yinger (Cambridge, MA: MIT Press, 2004), 251-82.
65. Minister of Education Naledi Pandor sharply criticized school governing bodies for excluding poor students. Rather than promising government-funded scholarships, she announced plans to limit the powers of school operating bodies; see Shaun Benton, "Free Schools on Cards, Powers of Governing Bodies to be Reviewed," AllAfrica.com, May 18, 2005. Available at http://allafrica.com/stories/ 200505180033.html.
66. School fees help create a two-tier education system, where the quality of education is substantially higher in schools that are able to charge relatively high fees compared to schools that rely primarily on public funding. Data from the Western Cape clearly show that (a) schools that levy high fees are able to substantially increase both the quality and the number of teachers they are able to hire and (b) the percentage of students passing the matriculation exams is positively related to the level of school resources; see Fiske and Ladd, "Balancing Public and Private Resources," 75-78.
67. While, for the reasons spelled out below, completely abolishing fees would be a bad idea, a reasonable argument can be made for placing limits on how high fees can rise.
68. Department of Education, Republic of South Africa, "Education Status Report," Pretoria, June 1999. Available at http://education.pwv.gov.za/Archives/StatusReport.htm.
69. Questions about education quality have also arisen because in recent years only about one-quarter of students who pass the matriculation exam score high enough on the exam to qualify for university admittance; see National Treasury, Trends in Intergovernmental Finances, 2000/01-2006/07.
70. Note that data in the last column of table 3 show that the 2004 pass rates were highest in Free State, Gauteng, Northern Cape, and Western Cape, which are the provinces with the highest levels of per pupil public spending (see table 1). What exactly these results say about the quality of education in these provinces is, however, unclear. This is partly because, prior to 2001, students in different provinces often took different versions of the exam (see Department of Education, Republic of South Africa, "Statement by Professor Kader Asmal, MP, Minister of Education on the 2001 Senior Certificate Examinations," delivered at Goodhope Auditorium, Parliament, Cape Town, December 27, 2001. Available at http://education.pwv.gov.za/Media/Statements_2001/Dec01/matric%20statement.htm. It is also because the differential pass rates across provinces may well reflect differences in the income or other characteristics of the students.
71. Claire Bisseker, "Improved Results: More Mirage than Miracle," Focus 34 (June 2004), Helen Suzman Foundation.
72. Ibid. Claire Bisseker, "Improved Results: More Mirage than Miracle," Focus 34 (2004),
73. The Department of Education is aware of the shortcomings of the matriculation exams as a foundation on which to base an assessment of student progress. Efforts have begun to put in place standardized examinations of student performance in grades 3, 6, and 9; see National Treasury, Intergovernmental Fiscal Review, 2001, 38. However, developing tests of student performance in reading, writing, mathematics, social studies, and the sciences is a particularly complex task in a multilingual country. Furthermore, to use the results of student achievement tests to assess both the performance of individual schools and of provincial education departments requires a value-added approach, namely, an analysis of the performance of the same cohort of students over time.
74. The National Treasury adopted this particular formula with the explicit goal of providing provincial departments of education with an incentive to reduce the enrollment of out-of-age pupils. It should also be noted that this formula also rewards provinces with a higher share of school-age children enrolled in public schools, i.e., school-age children who are neither dropouts nor enrolled in private schools.
75. National Treasury, Republic of South Africa, "Provincial and Local Government Allocations," chap. 7 of Budget 2005 - National Budget Review (Pretoria: National Treasury, 2005), 148.
76. For a detailed description and rationale for the costed norms approach, see Financial and Fiscal Commission, Recommendations: 2001-2004 MTEF Cycle (Midrand: Financial and Fiscal Commission, May 2000).
77. For a discussion of the use of measures of expenditure need in grant formulas, see C. Richard Rye and Rob Searle, "Expenditure Needs: Institutions and Data," in Financing Decentralized Expenditures: An International Comparison of Grants, ed. Ehtisham Ahmad (Cheltenham: Edward Elgar, 1997), 43-69.
78. For a discussion of how different countries measure expenditure needs for the purpose of allocating grants, see Andrew Reschovsky, "Expenditure Needs Compensation in a Horizontal Fiscal Equalization Program," chap. 13 in The Theory and Practice of Intergovernmental Fiscal Transfers, ed. Robin Boadwayand Anwar Shah (Washington, DC: World Bank, forthcoming).
79. For a summary and assessment of several alternative approaches to the measurement of the cost of education, see Andrew Reschovsky and Jennifer Imazeki, "Achieving Educational Adequacy through School Finance Reform," Journal of Educational Finance 26 (Spring 2001): 373-96;
80. and Bruce D. Baker, Lori L. Taylor, and Arnold Vedlitz, "Measuring Educational Adequacy in Public Schools" (report prepared for the Texas Legislative Joint Committee on Public School Finance, Texas School Finance Project, Austin, 2004). Available at http://www.tlc.state.tx.us/roadmap/tsfp/Reports/ Measuring%20Educational%20Adequacy.pdf.
81. Luis Crouch and Thabo Mabogoane, "No Magic Bullets, Just Tracer Bullets: The Role of Learning Resources, Social Advantage, and Education Management in Improving the Performance of South African Schools" (unpublished paper, Department of Education, Pretoria, April 1998).
82. Financial and Fiscal Commission, "The Financial and Fiscal Commission's Submission to Parliament on the Division of Revenue Bill 2005" (Midrand, March 16, 2005).
83. National Treasury, Republic of South Africa, Budget 2005 - National Budget Review, Annexure E -Explanatory Memorandum to the Division of Revenue (Pretoria: National Treasury, August 2005), 234. Available at http://www.treasury.gov.za.
84. Between 1995 and 2003 the rate of growth in education spending averaged only 2.65 percent per year. And in the 2004-5 fiscal year total spending on primary and secondary education was only 4.7 percent of the gross domestic product, relatively low compared to many other countries.