Financial management capital and school performance: Evidence from Mozambique

This project examines whether better financial management capabilities of local authorities and school directors improves the delivery of education services in the developing world. Compared to the private sector, little is known about the role of financial management capital in the public sector. Particularly in the context of underperforming education systems in the developing world. Poor financial management can compromise the effectiveness and efficiency of public service delivery by leading to the misallocation of scarce resources or facilitating the misuse of funds and leakage. Therefore, identifying the most effective way of using scarce resources is a pressing concern.

This study focuses on secondary schools in Mozambique, which faces significant challenges in improving secondary school enrolment, student performance, and completion rates. Yet, government expenditures per pupil in secondary education is almost three times higher than the average figure for the World’s least developed countries. (UNESCO, Institute of Statistics 2015).

To date, financial management has remained a blind spot among the established management surveys, such as the World Management Survey (WMS). Understanding the role played by financial management capital in improving service delivery is however critical for the developing world, in which education systems are likely to face tight budgetary constraints. Moreover, lack of financial management capital can also pave the way for patronage and corruption to guide, and consequently compromise, the allocation of resources in the system.

This study will create a baseline survey of financial management practices in the education sector of Mozambique. To examine the role of financial management capital in conditioning the efficiency of secondary schools to deliver secondary education, a new survey on financial management practices in schools will be designed and implemented. This survey instrument will build on the methodological approach followed by the WMS so as to help validate and position the measurements of financial management within the existing methodology for assessing management capital.

The researchers will work closely with the Ministry of Education to design and implement the survey across a sample of 200 secondary schools. The results will allow the scope of testable high impact interventions to be narrowed down, with the potential to sustainably improve the financial management capabilities of schools. These interventions will be designed and implemented in collaboration with the Ministry of Education.