A WORLD BANK STUDY School Infrastructure in Paraguay NEEDS, INVESTMENTS, AND COSTS Quentin Wodon School Infrastructure in Paraguay A WORLD BANK STUDY School Infrastructure in Paraguay Needs, Investments, and Costs Quentin Wodon © 2016 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 World Bank Studies are published to communicate the results of the Bank’s work to the development com- munity with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally edited texts. This work is a product of the staff of The World Bank with external contributions. The findings, inter- pretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Library of Congress Cataloging-in-Publication Data has been requested School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 Contents Acknowledgments ix Abbreviations xi Chapter 1 Introduction 1 Organization 1 Chapter 2 Basic Infrastructure Diagnostic for Public Schools 5 Abstract 5 Introduction 5 Brief Diagnostic of Paraguay’s Education System 6 State of Basic Infrastructure in Schools 8 Index of Basic School Infrastructure Quality 13 Conclusion 19 Chapter 3 Budget Allocations and Funding Needs for School Infrastructure 21 Abstract 21 Introduction 21 Budget Allocations for School Infrastructure 23 Decomposition of Budget Shares for Basic School Infrastructure 25 Funding Needs for School Infrastructure 29 Conclusion 34 Chapter 4 Primary School Infrastructure and Student Performance 35 Abstract 35 Introduction 35 Methodology and Summary Statistics 37 Regression Estimates 42 Conclusion 45 School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 v VI Contents Chapter 5 Classroom Gaps and Targeting Performance of Investments 47 Abstract 47 Introduction 47 Methodology and Data 48 Results 52 Conclusion 55 Notes 55 Bibliography 57 Figures 3.1 Budget for Investment and Construction and Equipment, 2012 PYG 23 3.2 Budget for Construction and Equipment in Basic and Upper Secondary Education, 2012 PYG 24 3.3 Budget Shares for Construction and Equipment 24 Tables 2.1 Summary of PREAL’s Diagnostic of Paraguay’s Education System 7 2.2 Public Education Spending and Spending Per Student, 1999 and 2010 8 2.3 Functioning Basic School Infrastructure by Area and by Education Level 10 2.4 Facilities in Need of Repairs as Share of Facilities in Good or Average Condition by Area and by Education Level 12 2.5 Facilities in Construction as Share of Facilities Being Used by Area and by Education Level 13 2.6 Factorial Analysis of Basic School Infrastructure 14 2.7 Index of Basic School Infrastructure by Department 15 2.8 Location Correlates for the Logarithm of the Normalized Index of Basic School Infrastructure Quality 18 3.1 Budgets and Budget Shares Allocated to Basic School Infrastructure Investments 26 3.2 Decomposition of Average Rates of Year-on-year Changes in Budget Shares 28 3.3 Estimation of the Potential Budgetary Cost of Selected Basic Amenities for Paraguay’s Schools 30 3.4 Potential Budgetary Cost of New Classrooms for Paraguay’s Schools 33 4.1 Impact on Test Scores of School Infrastructure and Pedagogical Supplies 38 School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 Contents vii 4.2 Summary Statistics for the Variables of Interest, Paraguay 2008 (Not Weighted) 40 4.3 Correlates of Primary Public School Passing Rates, Paraguay 2008 43 5.1 School Infrastructure Poverty and Inequality Measures (n=30) 52 5.2 Analysis of the Targeting Performance of Classrooms in Construction (n=30) 53 5.3 Sensitivity Analysis of Infrastructure Poverty Measures to the Norms Used 54 5.4 Sensitivity Analysis of Targeting Performance Indicators to the Norms Used 54 5.5 Benefit Incidence Analysis of New Classrooms and Classrooms Not in Use 55 School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 Acknowledgments This study was written at the World Bank as an input for a nonlending technical assistance task for Paraguay managed by Rafael de Hoyos in the Latin America Region and as part of a work program on education costing managed by Quentin Wodon in the Education Global Practice. Partial funding for the study was pro- vided by a grant from the Global Partnership Education for work on out-of- school children and education costing. Comments and suggestions from Rafael de Hoyos and Jessica Rodriguez are also gratefully acknowledged. The opinions expressed in this study are only those of the author and need not represent those of the World Bank, its Executive Directors, or the countries they represent. School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 ix Abbreviations CAI Classroom Availability Index CO2 carbon dioxide C&E construction and equipment GDP gross domestic product MEC Ministry of Education and Culture NI Normalized School Infrastucture Index PPP purchasing power parity PREAL Progreso Educativo del Programa de Promoción de la Reforma Educativa en América Latina y el Caribe PYG Paraguay guaraní School Infrastructure in Paraguay • http://dx.doi.org/10.1596/978-1-4648-0448-9 xi CHAPTER 1 Introduction Organization What is the state of school infrastructure for primary and secondary education in Paraguay? How much is invested by the government in order to improve school infrastructure and how have these investments evolved over time? What is the legal framework for such investments and is it appropriate? Given budget constraints, which types of investments are likely to be most needed in order to help improve student learning? Finally, how well targeted to the schools most in need are the infrastructure investments being made today? In order to help inform decision making by the Ministry of Education in this area, the objective of this study is to provide tentative answers to those ques- tions on the basis of administrative budget data as well as school-level data collected through a 2008 school infrastructure census. The literature on education production functions suggests that better basic infrastructure in school is likely to have a positive impact on school attainment and learning. While this impact may not necessarily be very large, students should be able to learn in an adequate physical environment. At the same time, many countries including Paraguay face hard budget constraints. It is therefore important to assess not only how much investments are needed in schools but also which types of school infrastructure investments are likely to bring the most benefits, and in which schools new investments should be made. The purpose of this study is to provide a preliminary analysis of these issues using both admin- istrative budget data and school-level data in order to help inform decision mak- ing by the Ministry of Education.