Administrative decentralisation and its impacts on educational expenditure and student outcomes: Evidence from Colombia

A substantial decentralisation reform occurred in Colombia school education in 2001. The government established an arbitrary rule that granted municipalities with a population greater than 100, 000 almost complete autonomy to provide education services (certification). Going beyond some mechanisms identified in previous policy evaluations (such as a higher proportion of higher-quality teachers) we analysed how reform affected the investment of local resources in education and the distribution of the total budget in key areas of the school system. Certified municipalities experienced an increase in education expenditure, after discounting teachers’ payroll, because of increased efficiency in the management of total resources, both locally raised and central government transfers. This allowed higher expenditures in school infrastructure, education quality, and other education-related programmes, all key components of education policy. In addition, after 2002 the competitiveness of public schools increased in certified municipalities, compared to non-certified areas. Achieving better student outcomes was primarily explained by changes in the allocation of resources in certified municipalities that resulted in increased efficiency after gaining autonomy. Lastly, certification enhances competitiveness of public schools as against private ones.