February 2, 2018

Financing School Improvement in Mexico

apples on top of books

Mexico faces significant challenges in education — one of these is to guarantee decent and good infrastructure in public schools. In the country, 10 percent of the schools lack electricity, in poor states the numbers increase up to 20 or 30 percent. To improve school infrastructure, the federal government launched the program Escuelas al 100 (Schools at 100) in 2014, as a component of the Education Reform Bill (which was approved in 2013).

Escuelas al 100 aims to improve schools and assure that all of them meet their basic infrastructure needs, such as electricity, water, bathrooms, walls, water fountains, cement floors, etc. More than 50 trillion pesos (almost $3 billion) will be invested until 2018 and around 2,900 schools have received funding from this program. More than 5 million students in 33,000 schools, at all levels (from preschool to university), will benefit from the program. The schools with more urgent needs are being prioritized — most of them are in the poorest states of Mexico, such as Oaxaca and Chiapas.  

Escuelas al 100 is innovative because it combines the rapid availability of resources with increased transparency and accountability. First, it accelerated the availability of resources by using a financial vehicle based on education certificates or bonds in the Mexican stock market. Before the reform, a federal fund granted the states a significant amount of money for education. However, the money was not always used for education purposes, sometimes being diverted to other projects. In the new scheme, around one-third of the money provided by this fund over the next two decades is being allocated for use during the current presidential administration (2012–2018) for education infrastructure. In other words, the states agreed to receive more resources in a shorter time by committing a fixed percentage of the future resources granted from federal funds to the program.

Second, this mechanism guarantees accountability and transparency. The program is subject to Mexican stock market regulations and the national independent institute of transparency in Mexico verifies that the resources are used appropriately by the local education authorities. In addition, any person with access to the internet can learn where and how the money is being used in each school, as the Education Department is responsible for publishing the information online. Finally, the program also encourages the participation of the school community of teachers, parents, and staff since almost all of the resources are transferred directly to the schools. The community decides together how they will spend the money to improve their schools.

Some voices have raised concerns about this program, arguing that it opens the door to the privatization of public education in Mexico. Many teachers from the south of the country, particularly those from the CNTE (Coordinadora Nacional de Trabajadores del Estado — a dissident union of the national union SNTE, Sindicato Nacional de Trabajdores del Estado) have shown discontent with reform and the program. One of their arguments is that the bonds may lead investors to have a voice in school decisions. However, the education certificates do not provide any decision power to those who invest in these bonds. On the contrary, it fosters school autonomy because it is the school community who decides how they use their resources to improve the school.

So far, it is too early to evaluate the general success of the program. Still, we can already recognize that the program offers innovative sources of funding and at the same time promotes transparency, accountability, and community participation. In the medium and long term, it would be interesting to analyze the effectiveness of the program not only by studying the improvement of school infrastructure but also the impact this might have on the quality of the education. 

The views expressed in the Government Innovators Network blog are those of the individual author(s) and do not necessarily reflect those of the Ash Center for Democratic Governance and Innovation, the John F. Kennedy School of Government, or of Harvard University.

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