预算真有意义吗？乌干达在教育方面公共支出的例子

POLICY RESEARCH WORKING PAPER 1926 WFs f I926 Do Budgets Really Matter? A survey can prO\ l a uset, reaiity check where institutions are weak Evidence from Public Spending Certainly, budgets and cff-cii on Education and Health in Uganda statistics are inadeciuate as guide for policyrnakei s. Emmanuel Ablo Ritva Reinikka The World Bank Africa Region Macroeconomics 2 June 1998  j C- Wi:.OR .i 5.X.oitxG PArER 1926 Summary findings Ablo and Reinikka demonstrate that budget allocations capitation grant meanr for schools. (An increase in alone can be misleading in explaining outcomes and enrollments which was not taken in-to accoulnt when the making policy decisions, when institutions are weak. total amount of the grant was calculated is responsible They diagnose the problem, using empirical evidel:ice for the remaining discrepanicy.) Similarly, at best, schools from primary educatioin and heal'th care in Uganda, but were allowed to keep only a third of mandatory tuition arguing that a similar problem exists in many countries. fees from parents; tihe rest went to district education Adequate public accounts are not available so they offices. carried out a field survey of schools and clinics to collect By and large, salary payr;ents did reach the schools, data on spending. so at least the wage part of the increase in budget Problems with the flow of public funds have to do allocations filtered down through the system. The only largely with governance and a lack of accountability. systemiiatic way of misappropriating salary funds were Among problems with the service delivery system: "ghosts" on the payroll. Close to 20 percenit of all * Primary enrollments increased 60 percent in L1991- teachers on the payroll were removed as ghosts in 1993. 95, but official figures indicate enrollmrenits were The behavior of public service facilities in the two stagnant. Such a stunning discrepancy indicates that sectors varies considerably. Schools, for example, keep official data cannot always be trusted. systematic records of financial flows and enrollments * The government's share of funding increased over (perhaps because parents provide most of the funding time, but public primary education was still funded and are likely to insist on accountability). The health care largely by parents, who contributed, on average, mnore sector does not keep good records. than 70 percent of total spending on schools in 1991 Since release of the survey results, there have been (median 40 percent) and 60 percent in 1995 (median 20 changes. Among them, monthly transfers of public funds percent). Parents' contributions continued to increase are reported in the media; school-based procurement has despite higher public spending. replaced the central supply of construction and other * Less than 30 percent of funding intended for materials; and an effort has been nmade to institute basic nonsalary public spending actually reached the schools in public accounting systems in the public sector, including 1991-95; district authorities kept and used most of the districts. This paper - a product of Macroeconomics 2, Africa Region - is part of a larger effort in the region to improve public expenditure management and service delivery. Cop:,es of the paper are available free from the World Bank, 1818 H Street NW, Washington DC 20433. Please contact Kathryn Rivera, roomJ10-281, telephone 202-473-4141, fax 202-473-8262, Internet address krivera@worldbank.org. The authors may be contacted at eablo@worldbank.org and rreinikka@worldbank.org. June 1998 (35 pages). The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, anid conclusions expressed inl this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Produced by the Pcolicy Research Disseminationi Center  DO BUDGETS REALLY MATTER? EVIDENCE FROM PUBLIC SPENDING ON EDUCATION AND HEALTH IN UGANDA Emmanuel Ablo and Ritva Reinikka The field survey and data processing were carried out with the help of Mimi Klutstein-Meyer, Abel Ojoo, Matthew Verghis, and the staff of Management Systems and Economic Consultants Limited and the Economic Policy Research Centre, Makerere University, Kampala. Roboid Covington patiently prepared a number of drafts of the paper. Helpful comments were received from Fred Kilby, John Mackinnon, Peter Miovic, and Jacob Svensson. Generous financial support from the Swedish Development Agency (SIDA) for the field survey is gratefully acknowledged.  I. INTRODUCTION According to the prevailing normative view of government, once the right policy or intervention has been found - be it for correcting market failures and externalities, crowding-in private investment, or achieving a more desirable distribution of income - the government is assumed to implement it as designed, and the desired effects will follow. Governments are viewed as benevolent single agents, behaving in the same way everywhere in the world, and policy-making is a technical problem rather than a political process that varies between countries (Dixit 1996). The normative view of government has led to the general practice of measuring public expenditure, both capital and recurrent, by budgetary allocations when actual spending data are not readily available. Public expenditure reviews carried out by the World Bank are an example of this practice. This paper argues that budgetary allocations can be quite misleading in explaining outcomes and making policy decisions in a weak institutional context, particularly in Africa. While there are new theories of multi-task and common agencies that can explain weak incentives within governments, this paper presents a detailed diagnosis of the problem in practice, using empirical evidence from Uganda. We argue that the Uganda case is representative of the problem in many poor countries, particularly in Sub-Saharan Africa. The principal motivation for this study was the observation that since 1987 public spending on basic services had increased substantially in Uganda, albeit from a small base, while several officially reported outcome and output indicators remained stagnant. The most obvious disparity in outcome indicators was observed in primary school enrollments. Despite the fact that budgetary allocations for education increased over  2 Do Budgets Really Matter? time, there was hardly any increase in the officially reported enrollments in the 1990s.' Conditionality of the structural adjustment programs of the World Bank aLlso supported increases in spending on basic services and contained provisions for the protection of budgetary releases for these services from within-year cuts in the event of inflationary pressures or shortfalls in revenue or aid flows. Our hypothesis for the study was that actual service delivery (output) is much worse than budgetary allocations would imply because public funds (inputs) do not reach the intended facilities as expected, and hence outcomes cannot improve. Reasons for facilities not receiving the funds could rarnge from competing priorities at various levels of government to misuse of public funds. To test this hypothesis, budgets and actual spending vwere compared in two selected sectors, primary education and health care. Although we do not attempt a comprehensive analysis of the determinEnts of public sector efficacy, the government's ability to translate budgetary allocations into actual spending at the facility level is a useful proxy for it. As adequate public accounts are not available in many African countries, including Uganda, a field survey of schools and clinics had to be carried out to collect actual spending data.2 The field survey confirmed the hypothesis that input flow suffers from serious problems which, to a large extent, have to do with governance and lack of accountability. But as documented in this paper, the survey also unearthed a host of other features of the service delivery system that were quite unexpected but nonetheless critical to the functioning of the health and education services and hence to any intervention in these sectors. First, instead of being stagnant as indicated by the officially reported figures, according to the school survey primary enrollments increased by 60 percent in 1991-95. Second, although the government's share increased over time, public primary education 1 In 1997 primary enrollment increased quite dramatically, following government's announcement of free universal primary education for four children per family. 2 In order to shed light on actual spending, the government initiated in 1990 efforts aimed at developing and implementing a financial tracking system for primary education and health (Republic of Uganda, 1990, 1992). These efforts bore little or no fruit.  Evidence from Public Spending on Education and Health in Uganda 3 was mostly funded by parents who, on average, contributed as much as 74 percent of total school spending in 1992 and 60 percent in 1995 (42 percent and 23 percent at the median school, respectively). Strikingly, parents' contributions continued to increase in real terms despite higher public spending. Third, we demonstrate that the behavior of public service facilities in different sectors can vary considerably even within one country, depending on the institutional context and incentives they face. Survey work is typically limited to examining effects and impact of policies or interventions on households and firms, while inputs, such as flow of public funds, and outputs, such as primary enrollments, are left solely for official statistics or administrative records. As this study demonstrates, survey work can provide a useful reality check in circumstances where institutions operate sub-optimally, and official statistics are not an adequate guide for policy-makers. There are strands of recent mostly theoretical literature that differentiate governments as providers of public goods. Svensson (1997), for example, finds that the control of public policy is less effective the higher society's polarization and degree of social conflict, resulting in higher public spending but a lower supply of public goods. Thus, it is important to separate the effects of public capital on welfare, from the effects of public spending on public capital. Pritchett (1996) argues that governments are different from the private sector in the extent to which they behave as profit-maximizing investors. If public investment is guided by motives other than profitability, the cost of cumulated public capital is likely to be higher than its value in terms of future returns. Therefore, using investment cost to measure public capital across countries may indeed be misleading. A number of recent empirical papers also highlight the divergence between the actual and potential impact of public spending on health outcomes in developing countries. Filmer and Pritchett (1997) for example find that 95 percent of cross-national variation in child mortality can be explained by non-health policy related factors, such as per capita income, income distribution, female education, and a number of cultural  4 Do Budgets Really Matter? factors, while the impact of public spending - typically measured by budget allocations - is very small and statistically insignificant. The rest of the paper is divided into four sections. Section II briefly describes the field survey carried out in Uganda. Section III examines official data on primary enrollments over time, compares them with the facility survey data, and presents the main results of the field survey of primary schools with respect to actual public and private spending. Section IV explores service delivery and actual public spending in primary health care. Finally, Section V summarizes the findings of the study as well as the subsequent policy changes which were introduced to increase accountability and transparency in the Ugandan public service. II. FIELD SURVEY Ideally, the public accounting system should be able to provide timely information about actual spending on various budget items and programs. This is not often the case in many low income countries. As the revival of the accounting system has been slow in Uganda, it was necessary to embark upon a field survey to gauge the extent to which public resources actually filtered down to the intended facilities. A survey of 19 districts covering 250 government-aided primary schools and close to 100 health clinics was carried out in 1996, covering the period 1991-95.3 Apart from school income and expenditure, the objective of the survey was to collect data on primary enrollments and health service delivery at the facility level over time.4 3 At the time of the survey, there were about 8,500 'government-aided' primary schools, which were supposed to receive a large proportion of their funding from central and local government. The rest of the schools (1,500) were either profit or non-profit private or community schools. 4 For the sample selection, the country was first divided into regions. In order to bring out regional differences more clearly, the traditional four regions (North, East, West and Central) were reconfigured into seven regions, namely: Northwest, North, Northeast, East, Central, Southwest and West. Kampala was treated as a separate region because it enjoys many advantages over the rest of the country. The 39 districts were then arrayed into three groups, based on the fiscal year in which a particular district first received a separate budget  Evidence from Public Spending on Education and Health in Uganda 5 Bearing in mind the budget constraint for the survey, the number of schools visited in each district was fixed in the range of 10-20. Among the districts selected, Bushenyi had the largest number of primary schools (399 in 1994), while Bundibugyo had the smallest number of schools (59). Specifically, in the districts with less than 100 government-aided schools the enumerators visited 10 schools. Where the number of schools was between 100 and 200, they visited around 15 schools, and in the districts with more than 200 schools, they visited 20 schools. The primary leaving examinations results, supplemented by information about school facilities, were used as criteria for the selection of schools within a district. Both good and poor performers in terms of examination results were included in the district sample, which was determined in consultation with the district education officer. There are many more schools than health facilities in every district. Surprisingly, some districts (Kapchorwa and Kisoro) had no government health centers at all, while others had as many as ten. Of course, lack of government facilities could be compensated for by the availability of missionary, private or NGO facilities, which often benefit from government support. Five primarily government facilities were visited in each district, comprising two health centers, two dispensaries/maternal units and one aid-post, or some other combination of these facilities, decided in consultation with the district medical officer. Enumerators who collected the data from schools and clinics were mainly former teachers and health workers resident in the districts. Standardized forms were used. In addition, interviewers made qualitative observations to supplement the quantitative data. Enumerators were trained and closely supervised by a local research team to ensure vote under the decentralization program that commenced in 1993. The objective was to pick one district per region in each successive phase of decentralization. In practice, only two districts were selected from the smaller regions. After some other minor adjustments, the following 19 districts were selected: Kampala; Arua, Moyo (Northwest); Apac, Gulu (North); Soroti, Moroto, Kapchorwa (Northeast); Jinja, Kamuli, Pallisa (East); Mukono, Mubende, Kiboga (Central); Bushenyi, Kabale (Southwest); and Kabarole, Hoima, Bundibugyo (West). Kiboga, which is a new district, had to be subsequently dropped due to limited data availability.  6 Do Budgets Really Matter? quality and uniformity of data collection and to assess the standard of record keeping in schools and clinics. IXI. PRIMARY EDUCATION AND PUBLIC SPENDING A. PRIMARY ENROLLMENTS As mentioned above, the Table 1: Official Enrollment:Data from principal motivation for this study was Government-Aided Primary Schools, 1987-97 the observation that primary - Year Schools Teachers Students, mill. enrollments did not seem to react to 1987 7,627 72,970 2.31 increased plublic spending in Uganda. 1988 7,905 75,551 2.42 1989 7,684 81,418 2.53 The main source of data for primary 1990 7,667 81,590 2.28 1991 8,046 78,259 2.54 enrollments is the annual school census 1992 8,325 86,821 2.36 1993 8,430 91,905 2.67 carried out by the ministry of 1994 8,442 84,043 2.60 education. To obtain the necessary 1996 8a3 82/a0 2.64 infonnation the ministry sends out ~~~........................ 4 ................ ............................ 98''-' ... ........................ 5J',........ information the ministry sends out 1997 10,000 98,700 5.30 questionnaires to district education Source: Ministry of Education. officers. The latter send them on to schools which return the questionnaires through the same channel. Field work by the census staff is minimal.5 Prior to introduction of free universal primary education in 1997, primary school enrollment in government schools, according to official data, was almost stagnant for ten years (Table 1).6 Since the number of children of primary school age was increasing due 5 The 1992/93 integrated household survey recorded an average gross primary enrollment of slightly over 90 percent, while net enrollment (the proportion of children between 6 and 12 years of age enrolled in school) was 67 percent nationally. The net enrollment rate among the lowest expenditure quintile was only 46 percent, and 59 percent for the second lowest quintile, compared to 81 percent for the highest quintile. High drop-out and repetition rates were also common (World Bank 1996a, 1996c). 6 The introduction of free education for four children per family in January 1997 brought a large increase in primary enrollment, rising to 5.3 million students. The latter figure is based on a  Evidence from Public Spending on Education and Health in Uganda 7 to high population growth, it follows that net primary enrollment rates must have fallen during the period. The official data cannot, however, be easily verified without going to the school level because virtually no reliable educational statistics are kept by the district education officers. The well-developed record-keeping of the 1960s broke down in the political and military turmoil of the 1970s and early 1980s and has not yet recovered. Table 2: Survey Enrollment Data 1991-95 Year 1991 1992 1993 1994 1995 Number of students 81,318 90,330 109,063 119,919 129,087 Annualgrowthrate(%) 11 21 10 8 Number of teachers 3,077 3,312 3,663 3,897 3,498 Annual growth rate(%) 8 11 6 -10 Student-teacher ratio 26:1 27:1 30:1 31:1 37:1 Source: School Survey Quite unexpectedly, the school survey results were found to be in contrast with the trend in the official enrollment figures (Table 2). Instead of being stagnant, there was an increase of 60 percent in primary enrollment in the sample schools between 1991 and 1995. The overall student-teacher ratio increased from 26:1 in 1991 to 37:1 in 1995. The survey results seem actually more plausible than the official figures, given the continuous improvement in the political and socio-economic environment and public finance since 1987. As the survey was based on a careful examination of individual school registers, it casts a serious doubt over the officially reported enrollment statistics, which appear to understate grossly the progress made in the 1990s. It is very difficult to determine where in the delivery system the incentive to under-report was the highest. One can assume, for example, that at the school level it would have meant a smaller amount of tuition fees to be remitted to the district, while at nation-wide headcount in 1997. Most of the increase was in P1, revealing a high private demand for education. Both under- and over-aged children entered P1, producing an exceptionally large cohort (2.1 million children in 1997).  8 Do Budgets Really Matter? the district level under-reporting would have resulted in lower disbursements of capitation grants to schools. B. AVAILABILITY OF DATA ON PUBLIC SPENDING Thie total budgetary allocation Table 3: Recurrent Allocation for Education for recurrent expenditure on in Fiscal Years (1991 Prices) education increased almost three-fold U Sh (million) in real terms during 1991-95 (Table 1991 19,202 1992 30,002 3).7 Neither functional nor spatial 1993 24,569 disaggregation of education spending 1995 351,89 is easy, however. First, at the central 1996 49,027 1997 68,081 government level, data were not Source: Minisy of Finance available on salaries paid to primary school teachers either by district or by school in 1991-95. The only data available at the time of the survey were the aggregate salary payments, lumping together payments to teachers in primary, secondary and tertiary levels as well as to non-teaching staff. Needless to say that this made systematic comparison between budget allocations and actual spending at the school level impossible with respect to teachers' salaries. A factor that further complicated efforts to track salary spending was the fact that there were more teachers at the school level than on the central government payroll. Additional teachers were hired directly by schools and funded by parent-teacher associations (PTAs). The only systematic information available at the central government level on primary education was capitation grants for non-wage spending. Second, our intention was to track public spending through the entire delivery system, that is, the central government, districts and schools. The field survey revealed that the district level records for both non-wage and wage spending are even worse than 7 The exchange rate of one US dollar ranged from 960 to 1200 Uganda Shillings during 1991-95.  Evidence from Public Spending on Education and Health in Uganda 9 those at the central government level. The quality of available inforrnation both on transfers from the center and disbursements to schools was so poor - both prior to and after decentralization - that districts simply had to be excluded from the expenditure tracking exercise. Strikingly, school records were found to be relatively comprehensive. Presumably parents, who prior to 1997 contributed substantially to school income, demanded financial information and accountability from the school. Therefore a comparison of budgetary allocations and actual spending could be made between the central government outlays for non-wage spending and the equivalent school income. Donor assistance for primary education has come in two main ways. First, financing has been made available for textbooks and other scholastic materials.8 Secondly, donors have provided substantial financing for school construction.9 With the exception of one major donor-funded project, tracking of donor and NGO expenditures was difficult in the absence of any disaggregated data at the center. 8 During the survey period about one third of the primary schools benefited from IDA support to instructional and other materials. Data on the value of the books received by district and by school are, however, not available. Most schools surveyed for this study acknowledged receiving textbooks (confirmed by the school records) and, to a less extent, other materials. Under USAID support, from a list of textbooks with their prices, each school made a selection based on its share of project funds. The textbooks were delivered to the office of the district education officer from where each school collected its order. This delivery system has ensured that textbooks reach the schools. Both the headmasters and district authorities interviewed during the school survey acknowledged the efficiency of the system. 9 The IDA Project to Alleviate Poverty and the Social Costs of Adjustment (PAPSCA) was directed at the rehabilitation and refurbishing over 2,300 primary schools in disadvantaged districts, but information on district-level expenditure is not available. PAPSCA is widely perceived to have achieved relatively poor results on the ground: materials went unused, buildings were left uncompleted and not enough effort was made to engender community participation. Another IDA project, the Northern Uganda Reconstruction Project, provided close to 900 classrooms in 1993-95.  10 Do Budgets Really Matter? C. ACTUAL SPENDING AT PRIMARY SCHOOLS The evidence presented in this section is based on data drawn from the field survey of 250 primary schools in 19 out of the 39 districts in Uganda. Table 4 presents a siumary of the sources of income (in 1991 prices) for these schools, both cash and in-kind. During the period 1991-95 the central government's financial contribution to primary education consisted of three components. First, it paid salaries of primary school teachers which was by far the largest itemt. This is consistent with the general finding that public spending choices tend to favor teachers' salaries over and above their role in producing educational outputs (Pritchett and Filmer 1997). Second, government provided fimding for capital expenditure which was limited almost entirely for rehabilitation rather than new construction.'" Third, the capitation grant for non-wage Table 4: Summary of School Income Data (1991 Prices) U Sh (million) 1991 1992 1993 1994 1995 Teachers' salary payments by GOU 213.9 214.7 381.3 748.6 914.6 Capitation grants received by schools 4.2 15.8 58.0 60.9 58.3 Other government funding 73.8 62.5 73.6 118.7 147.1 Total Government 291.9 293.0 512.9 928.2 1120.0 Tuition collected 55.4 96.8 116.6 136.2 141.3 o/w Tuition retained by schools 2.2 7.4 10.6 23.7 50.3 PTA levies 591.1 609.6 775.2 934.9 1032.7 Salary payments by PTAs 125.8 134.1 196.0 300.7 475.9 Total Parents '772.3 840.5 1087.8 1371.8 1649.9 Source: School Survey 10 In fact, since the 1970s the central Government has virtually abandoned its responsibility for classroom construction. In principle, the provision of classrooms became the responsibility of local governments. As the local government tax base needed to support school construction is very underdeveloped, local governments in turn passed the responsibility for classroom construction on to parents. To shoulder this and other school-related financial obligations, parent-teacher associations (PTAs) increasingly resorted to PTA levies. In addition, central government is responsible for counterpart funding which is the government's share of the cost of donor-financed development projects. It also incurs expenditure on teacher training, examinations and school inspection which have a separate allocation.  Evidence from Public Spending on Education and Health in Uganda 11 expenditure is a payment per student enrolled and is viewed as a matching (50 percent) government contribution against the mandated tuition fees which had to be paid by parents. The capitation grant is intended to be used to defray a portion of the costs of textbooks and other learning materials as well as general running costs of schools. Leaving donor assistance aside, the survey confirmed that the main sources of income for govemment-aided primary schools were parent-teacher association (PTA) levies collected from parents by the school, central government transfers and PTA contributions for teachers' salaries, govermment funding for capital expenditures and capitation grants, and retained tuition fees in this order of importance. PTA fumds are under the full control of the schools, and the PTA executive committee oversees the utilization of the funds. Being dependent on the ability of parents to pay, the level of PTA levies varies widely across districts as will be demonstrated below. Government's total contribution reaching the schools almost quadrupled between 1991 and 1995 in real terms, albeit from a negligible base. This is proportionately more than the overall increase in education spending. Despite an increase in government spending, parents' spending doubled during the same period. In per-student terms, parents' average contribution increased by 35 percent in real terms between 1991 and 1995, while the average govenment contribution more than doubled (Table 5). Table 5: Average Parental and Government Contribution To School Income per Student (1991 Prices) U Sh Parents Government Year Tuition PTA PTA Total Capitation Salaries Other Total Fees Levies Salaries Grant Collected 1991 682 7,269 1,547 9,498 52 2,630 908 3,590 1992 1,072 6,749 1,484 9,305 175 2,377 692 3,244 1993 1,069 7,108 1,797 9,974 532 3,496 675 4,703 1994 1,136 7,796 2,507 11,439 507 6,243 990 7,740 1995 1,094 8,000 3,687 12,781 452 7,085 1,139 8,676 Source: School Survey  12 Do Budgets Really Matter? Table 6 shows total Table 6: Median Parental and Government Contribution to School Income expenditure by parents and per Student (1991 Prices) governmeint at the median U Sh school during 1991-95. We Year Parents Government can see fiom the table that 1991 1,173 1,639 parents' expenditure at the 1992 1,631 2,215 1993 1,792 4,179 school level has a highly 1994 2,209 4,467 1995 2,291 7,729 asymmetric distribution so that the imedian is only a Source: School survey fraction of the mean in every year. Hence, the medians are a better mneasure of the general tendency in parents' expenditure than the means. The distribution of government spending is much less asymmetric, although the medians are lower than the means. At the median, parents' expenditure per student doubled during 1991-95, while the increase in government spending was almost five-fold during the same period. Table 7 shows the Table 7: Parental and Government proportion of school income that Contribution to School Income came from parents and Percent government during the period Year Parents Government 1991-95. Although declining in - Mean Median Mean Median importance over the survey period, 1991 73 42 27 58 parental contributions were clearly 1992 74 42 26 58 1993 68 30 32 70 the mainstay of the system of 1994 60 33 40 67 1995 60 23 40 77 financing primary education in government-aided schools. In Source: School Survey 1991-92 parental contributions accounted for over 70 percent of school income on average; by 1995 the share had declined to 60 percent. For the median school government funding was much more important, ranging from 58 percent in 1991-92 to 77 percent in 1995.  Evidence from Public Spending on Education and Health in Uganda 13 In the absence of an adequate breakdown of the salary data at the central government level, one of the key questions this study sought to answer is how much of the non-wage expenditure, i.e. capitation grants, made available by the central government actually reach the schools. The government stated policy was to disburse the grant in full to the schools either in cash or in-kind, using the district education officer as the channel. The capitation grant was set in 1991 at the nominal rate of U Sh 2,500 per child enrolled in P1-P4 and U Sh 4,000 per child enrolled in P5-P7. These nominal rates remained the same until 1997. There is no doubt that the nominal rates fixed in 1991 grossly underestimated the true cost of providing scholastic materials and maintaining the physical facilities. Although moderate since 1993, inflation has eroded the real value of the grant. Thus, one can conclude that the real increase in total recurrent expenditure over time (Table 3) was not at all reflected in non-wage spending on primary education. To compensate for the inadequacy of the central govermnent provision for non-wage (and wage) expenses, school administrators resorted to PTA levies. Table 8 presents data showing the amount of capitation grant which was supposed to be disbursed by the central government, and the average amount received by the schools (in 1991 prices).'" While the central government contribution in real terms was at its highest in 1991, the schools received on average practically nothing (two percent) of this grant. But even if 1991 and 1992 are viewed as extreme cases, the figures for 1993- 95, although better, are still shockingly low. For the three-year period, the schools received at best 28 percent of the capitation grant on average. The median was zero every year, which indicates a highly asymmetric distribution. The average capitation grant is based on the assumption that 70 percent of students were in P1 - P4 and 30 percent in P5-P7.  14 Do Budgets Really Matter? Interviews during the school survey confirmed that the bulk of the grant was retained by the local government authorities. Districts seem to have disbursed the grant on the basis of the number of students who had paid tuition. The funds intended for children who have enrolled but not paid tuition fees were typically retained by the urban or district councils. T]his practice was bound to hurt poorer communities the most because it is in these commtmities that parents are more likely to default on the payment of tuition fees. Table 8: Average Capitation Grant per Student (1991 Prices) U Sh Year Intended Grant Schools Actually Received Amount Mean Min. Median Max. 1991 3,100 52 ( 2) 0 0 792 (26) 1992 1,966 175 ( 9) 0 0 918 (47) 1993 1,869 532 (28) 0 0 1,254 (67) 1994 1,850 507 (27) 0 0 1,274 (69) 1995 1,737 452 (26) 0 0 979 (56) Source: School Survey Some local governments reported that the discrepancy was used to cover expenses of the district education officer (DEO). In some districts the funds retained by the local authorities were spent for purposes unrelated to education. In addition, part of the intended grant must have remained at the center as the government budgeted and disbursed the grant on the basis of the 199L enrollment figures. As enrollment increased overtime, the grant per student actually disbursed to the schools must have fallen. During the survey period, parental contributions towards financing primary education consisted of (i) tuition fees at the nominal rate of U Sh 2,500 per child in P1- P4 and U Sh 4,000 per child in P5-P7, that is, to match the capitation grarnt paid by the government; (ii) PTA levies which vary from district to district and from school to school; and (iii) contributions to teachers' salaries. Tuition fees collected by the schools were not remitted to the central government. Rather, they were left to each DEO to determine how the funds raised should be redistributed amongst the schools. In some districts the schools were allowed to retain a certain percentage or a fixed amount of the  Evidence from Public Spending on Education and Health in Uganda 15 tuition fee collected per student, with the balance transferred to the DEO. In other districts all the tuition fees collected was remitted to the DEO; subsequent disbursements to schools, either in cash or in-kind, may or may not have taken place. Collection efficiency of tuition fees was very low in 1991 but improved since 1992 (Table 9). In 1991 schools received on average four percent of the tuition collected. By 1995 the situation had improved considerably, but still only 36 percent of the average tuition fees was retained by schools. Hence, as shown in Table 9, local government authorities not only retained the bulk of the capitation grant, but also kept a large portion of the tuition fees paid by parents. Variation between districts was also substantial. Table 9: Average Tuition per Student (1991 Prices) IJSh Tuition Fees Tuition Fees Retained by Schools Collected Year Mean Mean Min. Median Max. 1991 682 27 ( 4) 0 0 256 (38) 1992 1,072 82 ( 8) 0 0 395 (37) 1993 1,069 97 ( 9) 0 0 398 (37) 1994 1,136 197 (17) 0 0 605 (53) 1995 1,094 390 (36) 0 0 546 (50) Source: School Survey Despite anecdotal evidence that teachers' salary payments suffer from delays and other problems in the flow of funds, interviews carried out during the survey indicate that government salary payments, by and large, reached the schools relatively well."2 Although it was not possible to track salaries through the system in the absence of annual disaggregated data at the center, the school survey provides other useful information, however. First, it shows that teachers derived salaries from three sources: government, PTA, and others, such as NGOs (Table 10). In 1991 and 1992 close to one-half of teachers' pay came from other sources than government. From 1993 onwards the 12 The only systematic way of misappropriating funds were 'ghosts' on the payroll. A total of 15,000 'ghosts' teachers were removed from the payroll in 1993.  16 Do Budgets Really Matter? government contribution started to rise significantly, thanks to a presidential directive which called for special treatment of teachers in the award of annual salary increases. In reflection of this policy, the government contribution to teachers' pay reached a high of 66 percent in 1994. Hence, one can conclude that increased budgetary allocations showed up in higher salary payments at the school level, but this information alone is not adequate to determine the extent to which budgetary allocations were translated to actual spending at the school level. Table 10: Contributions to Teachers' Salaries (1991 prices) U Sh (million) Year GOU % PTA % Other % Total % 1991 213.9 51 125.8 30 79.7 19 419.4 100 1992 214.7 52 134.1 33 61.5 15 410.3 100 1993 381.3 59 196.0 30 72.4 11 649.7 100 1994 748.6 66 300.7 26 86.7 8 ]L,136.0 100 1995 914.6 61 475.9 32 104.7 7 1,495.3 100 Source: School Survey Parental contributions have fluctuated from one quarter to one third of the total wage bill during the survey period. It is interesting to note that the share of total PTA contribution that was used for teachers' salaries increased from 16 percent in 1991 to 29 percent in 1995, despite the quadrupling of government spending on salaries. Total spending on instructional materials and other non-wage items by schools increased only by 20 percent in real terms between 1991 and 1995, while the equivalent spending on salaries (government and parents combined) tripled during the same period.  Evidence from Public Spending on Education and Health in Uganda 17 Not only were public spending choices favoring teachers' salaries over non-wage spending but teachers may have exerted disproportionate influence over PTAs as well."3 The salary payments per teacher, on average, more than tripled in real terms between 1991 and 1995. However, it is important to recognize that the starting point was extremely low (U Sh 11,360 or around US$12 per month in 1991). It was less than one quarter of what the civil service reform program considered a minimum 'living wage' at the time. Interviews for the school survey confirmed that absenteeism was a serious problem as teachers had to make a living outside their profession. Although the targeted 'living wage' was not yet attained by 1995, the situation had improved considerably from the teachers' point of view. While it is obvious from the data that teachers' salaries were given priority over instructional materials and other non-wage items, one can argue that a major pay increase was warranted in the Ugandan circumstances in order to reduce absenteeism and to restore the quality of teaching. There is evidence that this strategy actually worked to an extent, given the survey finding that enrollment increased by 60 percent during the period. At the same time one can argue that a more balanced spending pattern between salaries on instructional and other materials could have produced an even better result. D. REGIONAL DIFFERENCES As national averages conceal regional variations, it is useful to explore actual spending in the sub-regions included in the survey. First, Table 11 shows govermnent expenditures per student that reached the schools by sub-region (in 1991 prices). The western region appears to have the lowest per student spending at the school level. This could be explained by lower efficiency in the transfer system between the center and the schools than in other sub-regions. As schools are not larger in the West than elsewhere, a lower unit cost is not likely to result from a higher student-teacher ratio, and hence, a 13 To some extent, donor funds compensated for slow growth in non-wage spending, but the coverage of schools was limited.  18 Do Budgets Really Matter? lower wage bill. 14 The opposite may be true in the North and Northeast where classes are smaller and the per-student expenditure is therefore higher. Table 11: Average Government Contribution per Student Reaching Schools by Sub-Region (1991 Prices) U Sh Year Northwest Nort Northeast East Central Kampala Southwes West 1991 1,623 4,86 2,599 3,546 5,878 1,067 5,718 1,958 1992 1,772 3,97 2,781 3,315 4,220 2,348 4,392 2,488 1993 3,964 4,66 5,138 4,516 6,122 3,535 6,285 3,307 1994 7,384 7,52 8,405 8,048 10,120 6,438 7,962 6,235 1995 12,811 8,15 7,748 8,179 10,318 8,636 7,300 5,977 Source: School Survey To explore regional differences in efficiency further, a good proxy is the capitation grant as this grant was supposed to be the same amount per student across the country. Table 12 shows the share of the capitation grant spent on the intended purpose by sub- region. It appears that the North suffered from the worst inefficiency. It is also one of the poorest regions in Uganda, measured by household expenditure. If we assume that the poor performance of the North is due to the continued military disturbance, and hence unavoidable, then the least efficient sub-regions are the East, the Southwest and the West. It is interesting to note that the East, which is a relatively poor region in Uganda, suffers from major inefficiencies, while the equally poor Northeast and Northwest are among the more efficient regions. 4 This appears to be the case in Kampala, however, where the share of public funding is the smallest and classes are large.  Evidence from Public Spending on Education and Health in Uganda 19 Table 12: Average Capitation Grant per Student Reaching the Schools by Sub-Region (1991 Prices) Percent of Intended Grant Year Northwest North Northeast East Central Southwest West 1991 2 0 1 5 4 0 0 1992 13 0 13 5 16 11 12 1993 51 13 61 19 26 19 31 1994 33 10 45 22 51 31 25 1995 24 12 61 21 40 22 22 Source: School Survey Note: Kampala data are not comparable and hence omitted here. Parents', expenditures per student have a much larger spatial spread than public spending (Table 13). The level of private spending is the highest in the better-off central region and Kampala, while the three poor northern sub-regions and the West have extremely low spending levels per student. Table 13: Average Parents' Contribution per Student by Sub-Region (1991 Prices) U-Sh Year Northwest North Northeast East Central Kampala Southwest West 1991 1,345 1,048 839 6,932 27,545 49,084 3,064 1,480 1992 976 991 1,195 4,709 20,134 65,829 3,436 1,559 1993 1,107 1,763 1,175 5,500 22,176 46,170 4,440 1,988 1994 1,880 2,074 1,070 7,196 27,576 41,792 6,053 2,189 1995 2,034 2,277 999 8,522 31,568 37,286 6,520 1,795 Source: School Survey Finally, Table 14 shows private and public spending on primary schooling per student in 1994 by district (current prices). Public spending at the facility level varies a great deal, from U Sh 21,045 per student in Moroto to U Sh 6,073 in Kabarole. The (Spearman rank) correlation coefficient between public spending on primary schools and poverty measured by household expenditure is -0.228. Poorer districts seem to benefit from a somewhat higher level of public spending per student available to the schools.  20 Do Budgets Really Matter? Table 14: Public and Private Spending per Student by District in 1994 (Current Prices) U Sh District GOU Parents Total Apac 16,788 1,871 18,659 Anma 12,220 3,568 15,789 Bumdibugyo 14,248 3,355 17,603 Bushenyi 11,718 7,544 19,262 Gulu 7,256 5,537 12,793 Hojima 11,982 4,953 16,936 Jinja 11,647 25,189 36,836 Kabale 14,656 12,242 26,898 Kabarole 6,073 2,266 8,339 KaLmpala 10,790 70,044 80,834 Kainuli 10,533 9,163 19,696 Kapchorwa 13,278 4,406 17,684 Moroto 21,045 1,032 22,077 Moyo 12,972 1,541 14,514 Mubende 8,863 37,817 46,680 Mukono 18,054 47,352 65,406 Pallisa 15,935 4,433 20,368 So3oti 11,996 533 12,529 Mean 12,781 13,491 26,272 Median 12,108 4,693 18,961 Maximum 21,045 70,044 80,834 Milinimum 6,073 533 8,339 Std deviation 3,694 19,339 19,427 Source: School Survey However, this may also reflect a lower student-teacher ratio as households can afford to send fewer children to school in those districts. Again, spending by parents varies much more than public spending by district, from 1J Sh 70,044 per student in Kampala to only U Sh 533 in Soroti. Note that the median of private spending by district is only a third of the mean. There is a fairly strong positive correlation (0.56) between household expenditure and private spending on primary education. Figure 1 depicts the 1994 total and government spending per student by district, sorted by total spending from the lowest (Kabarole) to the highest (Kampala). It confirms that actual public spending is only modestly progressive as indicated by the correlation coefficient.  Evidence from Public Spending on Education and Health in Uganda 21 Figure 1: Total and Public Spending per Student by District in 1994 90,000 70,0004 . 60,000 = 50,000 / | Total I , 40,000 J i Public * 30,000 = 20,000 10,000 0 0 . O C 0 CO C mC 0 LI 0 CO 0 CO a >O 0 - 2 E >X O = *- X o oo -