According to official statistics, 20 percent of Uganda's total public expenditure was spent on education in the mid-1990s, most of it on primary education. One of the large public programs was a capitation grant to cover schools' non-wage expenditures. Using panel data from a unique survey of primary schools, we assess the extent to which the grant actually reached the intended end-user (schools). The survey data reveal that during 1991-1995, the schools, on average, received only 13 percent of the grants. Most schools received nothing. The bulk of the school grant was captured by local officials (and politicians). The data also reveal considerable variation in grants received across schools, suggesting that rather than being passive recipients of flows from the government, schools use their bargaining power to secure greater shares of funding. We find that schools in better-off communities managed to claim a higher share of their entitlements. As a result, actual education spending, in contrast to budget allocations, is regressive. Similar surveys in other African countries confirm that Uganda is not a special case.

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What are the most effective ways to increase primary school enrollment and student learning? We argue that innovations in governance of social services may yield the highest return since social service delivery in developing countries is often plagued by inefficiencies and corruption. We illustrate this by using data from an unusual policy experiment. A newspaper campaign in Uganda aimed at reducing capture of public funds by providing schools (parents) with information to monitor local officials' handling of a large education grant program. The campaign was highly successful and the reduction in capture had a positive effect on enrollment and student learning. (JEL: D73, I22, O12)

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This paper exploits an unusual policy experiment to evaluate the effects of increased public access to information as a tool to reduce capture and corruption of public funds. In the late 1990s, the Ugandan government initiated a newspaper campaign to boost schools' and parents' ability to monitor local officials' handling of a large school-grant program. The results were striking: capture was reduced from 80 percent in 1995 to less than 20 percent in 2001. We use distance to the nearest newspaper outlet as an instrument for exposure to the campaign. Proximity to a newspaper outlet is positively correlated with the head teachers' knowledge about rules governing the grant program and the timing of releases of funds from the center, but uncorrelated with test scores of general ability. A strong (reduced-form) relationship exists between proximity to a newspaper outlet and reduction in capture of school funds since the newspaper campaign started. This pattern contrasts sharply with the outcomes in the five-year period prior to the campaign. Instrumenting for head teachers' knowledge about the grant program, we find that public access to information is a powerful deterrent to capture at the local level.

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Reinikka and Svensson exploit a unique micro-level data counterparts, although government facilities have better set on primary health care facilities in Uganda to address equipment. These findings are consistent with the view the question: What motivates religious not-for-profit that RNP facilities are driven in part by altruistic (RNP) health care providers? The authors use two concerns and that these preferences matter approaches to identify whether an altruistic (religious) quantitatively. Second, the authors exploit a near natural effect exists in the data. First, examining cross-section experiment in which the government initiated a program variation, they show that RNP facilities hire qualified of financial aid for the RNP sector. They show that medical staff below the market wage, are more likely to financial aid leads to more laboratory testing of provide propoor services and services with a public good suspected malaria and intestinal worm cases, and hence element, and charge lower prices for services than for-higher quality of service and lower prices, but only in profit facilities, although they provide a similar RNP facilities. The findings suggest that working for (observable) quality of care. RNP and for-profit facilities God matters. both provide better quality care than their government This paper-a product of Public Services, Development Research Group-is part of a larger effort in the department to evaluate frontline health care delivery in poor countries. Copies of the paper are available free from the World Bank,