Indonesia - Can performance-based school grants improve learning?

The Results in Education for All Children (REACH) Trust Fund at The World Bank funded an evaluation that assessed the early impact of a performance-based school grants program on student learning in Indonesia. While all Jakarta government schools receive a fixed grant per student, under the new program top performing schools also receive a bonus. This evaluation focused on two separate effects in the first two years of the new program: the effect of announcing the performance-based incentive to schools, and the effect of receiving the bonus for top performing schools. Announcing the performance incentive had different impacts on primary and junior secondary schools. Student test scores improved in all junior secondary schools, with the largest gains being made in schools that were already the highest performing. However, in primary schools the impact on test scores was slightly negative, with modest improvement in low performing schools offset by losses in high performing schools. The Jakarta school grants program is distinct from many other pilots of performance-based grants in that it introduced RBF at scale, across an entire education system. The evaluation of this program took advantage of pre-existing administrative data, which made it possible to include all government schools at relatively low cost, without separate data collection for the evaluation. As such, there are several lessons learned from the implementation of this program that could inform the design of other interventions at scale. Future programs could be improved by using other measures of school performance in addition to test scores, considering alternative designs of the formula to determine grant allocations, and allowing schools more flexibility in experimenting with ways to improve learning.