PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB169 CR EQUITY AND EFFICIENCY OF EDUCATION Project Name Public Disclosure Authorized Region LATIN AMERICA AND CARIBBEAN Sector General education sector (100%) Project ID P057857 Borrower(s) Government of Costa Rica Implementing Agency Ministry of Public Education Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined) Date PID Prepared December 30, 2003 Date of Appraisal February 4, 2004 Authorization Date of Board Approval May 4, 2004 Public Disclosure Authorized 1. Country and Sector Background Key elements of Costa Rica Education Sector Strategy and Implementation Instruments. Costa Rica seeks to improve the quality, equity and efficiency of education at all levels. Specific sector goals include: (i) increasing early childhood care and education (ECCE) for ages 0-5; (ii) universalizing at least one year of preschool (for 6 year-old children); (iii) universalizing primary education completion with quality of learning; and (iii) expanding nationwide secondary education (both academic and vocational) with quality. These specific goals will be achieved with keen focus on equity—by targeting education services to traditionally underserved populations (including rural communities and ethnic minorities)—and with increased institutional efficiency and cost-effectiveness. While some goals are nationwide (ECCE and Public Disclosure Authorized Secondary Education), others focus on closing the gaps between regions and across income groups (preschool and finalization of quality primary education). The overarching policies of the Consejo Superior de Educación (CSE), the national body that defines education policies, orient these national educational aims: • Generating educational initiatives that increase equal access to pertinent, high quality opportunities for education and training, including universal access to preschool, increasing enrollment in secondary education, and improving quality at all levels. While the beneficiary group is broadly defined in terms of age, the Government will target specific, marginalized groups. Rural areas suffer from poor provision of services, especially multigrade primary schools and distance-learning secondary schools (Colegios de Telesecundaria); • Strengthening the overall development of students through a strong, balanced curriculum, by using innovative pedagogical methodologies and developing analytical, environmental protection and civic skills; Public Disclosure Authorized • Strengthening the mechanisms used to link education and training opportunities to the needs of the national and local economies, improving the overall quality of technical education and training and building public-private partnerships; and • Guaranteeing transparency and strengthening management of the education sector through increased administrative efficiency and optimal use of resources, via a more decentralized Ministry of Public Education that promotes greater local stakeholder participation. To achieve the education policies’ objectives, the country has committed a high share of public resources to the sector. The 2002 financial allocation increased by more than 70% of comparable resources in 1991.1 Today the education budget comprises 5% of GDP and 27% of total Government expenditures. While a significant share of the budget (84%) is allocated to human resources (both teaching and administration), 13% of the education budget (excluding higher education) is assigned to equity programs (such as scholarships, transportation, meals and education vouchers), to transfers to school councils (Juntas Educativas and Juntas Administrativas), and to quality inputs such as teacher training, infrastructure and educational materials. Operationally, the Ministry of Public Education (MEP) has launched a Plan called "Relanzamiento de la Educación Costarricense" (Revamping Costa Rican Education), which identifies clear benchmarks to increase the level, quality and equity of education. The general goals of the Plan are to: (i) close the rural-urban education attainment gaps (which continue even at the primary education level); (ii) increase and sustain the participation of the poor in education, and (iii) improve secondary and technical education. To guarantee equity, regions with low education outcomes and students and families from the lowest income quintiles will be especially targeted, most of which are rural. To improve efficiency, the human, physical, financial and technological resources available in the education sector will be strengthened and optimized. Given the low secondary education indicators (gross coverage of 65.6% in 2002 with a completion rate of only 30%), the Government is proposing to continue investing strongly at this level nationwide. Country Efforts to Achieve Education Sector Objectives: Improve Education Quality and Effectiveness. The CSE and the MEP are pursuing policies to close the rural-urban education attainment gap, improve education quality and increase the cost-effectiveness of the provision of education services. The Government’s cross-sectoral approach, called Plan Vida Nueva, targets social services in regions characterized by low social indicators, especially in education. In rural areas, the country is operationalizing cost-effective interventions to enhance: (i) integration among education services (multigrade schools, flexible and distance modalities, etc.); (ii) teacher training programs; (iii) curricular application; and (iv) administrative and pedagogical models. To track education development across regions and municipalities, an integrated information system called SIDE (Sistema de Información de Desarollo Educativo) is being conceptualized to take advantage of the rich education data generated by the MEP and other institutions and will be developed and made operational. Equity Program Sustainability and Impact on Low Income Students. Costa Rica supports education demand–side programs to complement supply-side education services, including: (i) school vouchers (cash transfers) to 10,000 school children from selected poor families to 1 Annual per-student expenditure increased from US$242 in 1991 to approximately US$462 in 2002 (in real comparable terms). purchase uniforms and school materials; (ii) scholarships (monthly stipends) to 43,000 children of poor families conditional on children attending schools; (iii) school transportation for 60,000 students; and (iv) school lunches (which absorb the most resources) for more than 500,000 students. In 2001, these programs comprised approximately 5% of the education sector budget. The Government's measures to induce demand for education are well substantiated. The Government seeks to improve targeting through updating and extending coverage of a beneficiary information system, Sistema de Información de Población Objetivo (SIPO) administered by IMAS (Instituto Mixto de Ayuda Social).2 Within this framework, the Ministry of Public Education (MEP) is seeking alliances with other institutions managing demand-side support programs and has accessed the SIPO to support targeting and resource allocation of its equity programs. Expansion of Secondary Education. The country is supporting national and targeted strategies to expand secondary education. Nationwide, the Government has increased access, which resulted in an improved secondary education net coverage from 61.2% in 1999 to 63.5% in 2002. To continue expansion and quality investments, in 2003, the MEP prepared a secondary education project to be financed by the IDB (Inter-American Development Bank). In rural areas, targeted and pertinent programs include television and radio-based modalities (telesecundaria) and non-formal education for at-risk-students (Nuevas Oportunidades). To increase pertinence of secondary education for employability and entrepreneurship of graduates, the MEP is building public-private partnerships with national and multinational firms embracing Corporate Social Responsibility (CSR). Institutional Development and Effectiveness of Sector Resources. The policies from the CSE and the Plan de Relanzamiento de la Educación emphasize the continued optimization of institutional capacity at all education sector levels. The goal is to improve effective organization, planning, administration, monitoring and evaluation of the school system. The MEP has begun a process of intra-Ministerial integration to improve team work, provide integrated education services and reduce transaction costs. The MEP is also strengthening its alliances with other institutions supporting education services, such as universities, NGOs, social subsidies providers and private corporations. On-going Constraints to Achievement of the Country’s Education Sector Goals: Uneven Education Quality. Despite substantial increases in education spending—in all educational levels—education quality is still uneven across the 20 educational regions in Costa Rica. In the 2002 National Achievement tests, regional scores in 6th grade ranged from as low as 45% (Aguirre) to as high as 81% (Cartago) in Mathematics, and from 64% (Aguirre) to 94% (Heredia) in Language.3 In 9th grade, the lowest Mathematics regional score was 16% (Santa Cruz) and the highest 45% (Turrialba); Language scores ranged from 28% (Upala) to 89% 2 To optimize institutional efforts, the SIPO database will serve to target not only IMAS programs, but also to support resource allocation of other